The PLG Lies Founders Keep Telling Themselves
Summary
Product-Led Growth (PLG) is one of the most talked-about strategies in SaaS, and one of the most misunderstood. Founders hear the term and reduce it to a pricing model, or a free tier, or the idea that a great product will grow itself through word-of-mouth alone. It’s not like that. PLG is a company-wide strategy that positions the product as the key driver of acquisition. This article breaks down the most common misconceptions, what PLG actually involves, and where to start if you are serious about it.
Table of Contents
Isn’t PLG just a free-tier model?
Some founders still claim to be “going PLG” by just adding a free tier or a trial, and then wonder why growth falls apart.
Pricing strategy is one of many considerations when going PLG, and it should never stand alone. There is always a strategic perspective to adopting a freemium model for your product, but it is also not for every product. Some products will benefit from time-based tiers like opt-in or opt-out free trials, others from usage-based trials, and still others from sandbox models or mixed models. And depending on the product, it may not even be wise to offer a free tier.
Wes Bush, founder of ProductLed, cites ZoomInfo as an example of a “free trial” button that leads straight to “book a call”, and it is not PLG. A free trial alone does not make a product-led business.
Product-Led Growth is not a pricing strategy. PLG is a methodology in which the product itself becomes the core element for acquiring, activating, and retaining customers. The term was first used by OpenView Venture Capital in 2016 to describe a focus on the product rather than relying heavily on marketing and sales.
Elena Verna, one of the most experienced PLG operators in SaaS, describes PLG as an organisational framework, it goes way beyond a monetisation tactic, and it is much more than a growth hack or a pricing buzzword.
So, if your PLG strategy is based on pricing, there is a long way ahead…
Can a great product really sell itself?
In short: kinda yes. Not necessarily how you think it would “sell” itself.
This is the romantic version of PLG: “If you build it, they will come”. And many people may fall into that trap.
Recently, I got in a brief with a client who mentioned he wanted to create a product that is so good it spreads on its own, users recommend it on Reddit and niche forums, and growth takes care of itself with minimal marketing spend. He named it a growth strategy based on a PLG business model.
Well, it is not really like that PLG works… Let me bring some data to illustrate this point!
McKinsey analysed 107 SaaS companies and found that the highest-performing PLG companies spend roughly 10% more of their revenue on marketing, sales, and R&D combined than high-performing sales-led companies.
Yep. Read that again.
The best product-led businesses may invest more, not less. They also generate 10% more in annual recurring revenue (ARR) growth and achieve valuation ratios that are 50% higher. So… the point is that the return on investment is worthwhile.
The difference is not that PLG companies skip the work. In a PLG environment, the product carries a larger share of the work. And this is totally related to the product experience.
The product demonstrates value before a paywall.
The product qualifies leads based on real usage.
The product handles strategic onboarding.
But all of that requires serious investment in product development, data infrastructure, and a deep understanding of users, enough to guide them to value fast.
PLG is about time-to-value (TTV). This means how quickly a new user reaches their first moment of genuine value. If that moment takes weeks or requires a sales call, you have not earned self-serve growth. You have just delayed the sale.
And here is the part founders often miss: only about 9% of free accounts convert to paid across all models, according to ProductLed’s benchmark data from over 600 SaaS companies. The best performers achieve dramatically higher numbers, but they do so through deliberate activation strategies, not passive hope.
Does PLG mean I don’t need a sales team?
I believe this is the major misconception in the PLG world lately — and a revelation of the day for some people: PLG and Sales are complementary, just like marketing strategies!
McKinsey’s survey of 625 SaaS buyers across five software categories found that 65% strongly prefer both sales-led and product-led experiences when purchasing a solution. Not one or the other. Both.
The idea that PLG doesn’t need sales teams has been debunked by companies that have actually built and scaled in a PLG environment. Over 60% of PLG companies add sales teams within two years. Even Atlassian, the poster child of “no sales team”, now runs enterprise sales.
Elena Verna says that PLG does not replace marketing and sales; it works as an accelerator for scalability and efficiency in both functions. In practice, most successful companies blend sales-led, marking-led and product-led strategies.
The industry has been moving toward a hybrid model called Product-Led Sales (PLS). Basically, using a bottom-up approach (traditional PLG) to generate demand and qualify users through product experience, but scaling with a top-down approach (Sales-Led) by attaching a sales function to close larger contracts and serve enterprise needs.
Wes Bush framed the PLG strategy as “serve before you sell”. And, honestly, it is a brilliant approach! It decreases demand for customer service, improves product desirability by demonstrating value before sales, and creates a natural path for adoption and retention. Sales in PLG feels like a natural path for users; it is a complementary solution used in a smarter way.
So, how does PLG actually work?
As I mentioned before, PLG touches product, marketing, sales, customer success, engineering, and finance. It is a fundamental shift in how the entire business operates.
Let’s go step by step, with a condensed overview to give a sense of what PLG is and how complex it can be — and how aligned with Product Designer services it is.
1. Start with a good foundation
Whatever framework you use, the foundation is the same: know your market, understand the problem better than your competition, and craft an offer that is impossible to refuse, providing true value to your users. It sounds simple, but there is a lot of work in it!
As a Product Designer, this is the key point: heavy user research shapes the entire product vision and sets the right strategies, too.
2. Design for self-serve value
The self-serve concept doesn’t mean “zero support”. It means easy to use, faster to adopt.
Your product experience should be the core priority of your business. Your users should feel the value faster. So, their experience should be intuitive and provide real solutions for their needs. Here is where the product design services shine the most, and they are based on extensive user research to make your product not only viable but desirable.
Onboarding in your product is not only about teaching users how to interact with it or making them aware of its latest updates, but especially about helping them see the true value of what you offer more quickly — what is commonly referred to as the “Aha Moment”.
3. Measure what matters
This is a critical point, and often neglected. Measuring the success of your process to iterate on the product in a user-first approach.
According to ProductLed’s benchmarks, only 34% of PLG companies consistently track activation metrics. That means 2 out of 3 companies pursuing a product-led strategy are not measuring whether users actually reach the value they promised.
Tracking data is fundamental to product iteration.
Track activation. Track time-to-value. Track where users drop off. Track product-qualified leads. Without these metrics (and others), you are guessing. And probably it will block you from scaling.
4. PLG is a teamwork
A North Star is important, but tracking specific metrics that impact different departments is a next-level approach for success.
Insight Partners calls cross-functional alignment failure the number one cited reason PLG efforts stall. Product, marketing, sales, and customer success need to operate from shared data and shared goals.
As Miro’s CEO has described, PLG is a complex cake where product, marketing, sales, and success are layered together. You cannot extract one ingredient and call it the recipe.
5. Growth in loops
The Pirate Metrics framework (AARRR — Acquisition, Activation, Revenue, Retention, Referral) is a type of PLG funnel widely used and valuable in many cases, but the most successful PLG companies often use flywheels for customer lifecycle, where growth loops of satisfied users generate new evaluators who become advocates and represent the growth machine you create better.
What should a founder actually do first?
Founders know their vision, understand the market, and can usually spot opportunities by comparing their product to the competition. But often neglect user research.
Stop guessing. Work on gaining a deep understanding of your users.
Users will share their expectations and which solutions are missing. Users will tell you what they value most and what is working, or not. Users will provide the data to guide your pricing strategy, onboarding decisions, and product experience.
Without users, there is no revenue. All other strategies follow from them.
This is exactly what I am working on with the client I mentioned at the beginning of this article. We are focusing on users because, in a product-led approach, they are the priority. And based on those findings, every strategy will be developed for them.
Further readings
Wes Bush, Product-Led Growth: How to Build a Product That Sells Itself (ProductLed Institute, 2019) — productled.com
McKinsey & Company, “From Product-Led Growth to Product-Led Sales: Beyond the PLG Hype” (Mina Alaghband, Nina Panagiotidou,Paul Roche, and Jeremy Schneider, 2023) — mckinsey.com
Elena Verna, “Product-Led Growth Is Many Things. But Here Is What It’s NOT.” — elenaverna.com
Elena Verna, “Not All B2B Companies Should Be Doing Product-Led Growth” — amplitude.com
ProductLed, “Product-Led Growth Benchmarks” (600+ SaaS companies surveyed) — productled.com
Isn’t PLG just a free-tier model?
Some founders still claim to be “going PLG” by just adding a free tier or a trial, and then wonder why growth falls apart.
Pricing strategy is one of many considerations when going PLG, and it should never stand alone. There is always a strategic perspective to adopting a freemium model for your product, but it is also not for every product. Some products will benefit from time-based tiers like opt-in or opt-out free trials, others from usage-based trials, and still others from sandbox models or mixed models. And depending on the product, it may not even be wise to offer a free tier.
Wes Bush, founder of ProductLed, cites ZoomInfo as an example of a “free trial” button that leads straight to “book a call”, and it is not PLG. A free trial alone does not make a product-led business.
Product-Led Growth is not a pricing strategy. PLG is a methodology in which the product itself becomes the core element for acquiring, activating, and retaining customers. The term was first used by OpenView Venture Capital in 2016 to describe a focus on the product rather than relying heavily on marketing and sales.
Elena Verna, one of the most experienced PLG operators in SaaS, describes PLG as an organisational framework, it goes way beyond a monetisation tactic, and it is much more than a growth hack or a pricing buzzword.
So, if your PLG strategy is based on pricing, there is a long way ahead…
Can a great product really sell itself?
In short: kinda yes. Not necessarily how you think it would “sell” itself.
This is the romantic version of PLG: “If you build it, they will come”. And many people may fall into that trap.
Recently, I got in a brief with a client who mentioned he wanted to create a product that is so good it spreads on its own, users recommend it on Reddit and niche forums, and growth takes care of itself with minimal marketing spend. He named it a growth strategy based on a PLG business model.
Well, it is not really like that PLG works… Let me bring some data to illustrate this point!
McKinsey analysed 107 SaaS companies and found that the highest-performing PLG companies spend roughly 10% more of their revenue on marketing, sales, and R&D combined than high-performing sales-led companies.
Yep. Read that again.
The best product-led businesses may invest more, not less. They also generate 10% more in annual recurring revenue (ARR) growth and achieve valuation ratios that are 50% higher. So… the point is that the return on investment is worthwhile.
The difference is not that PLG companies skip the work. In a PLG environment, the product carries a larger share of the work. And this is totally related to the product experience.
The product demonstrates value before a paywall.
The product qualifies leads based on real usage.
The product handles strategic onboarding.
But all of that requires serious investment in product development, data infrastructure, and a deep understanding of users, enough to guide them to value fast.
PLG is about time-to-value (TTV). This means how quickly a new user reaches their first moment of genuine value. If that moment takes weeks or requires a sales call, you have not earned self-serve growth. You have just delayed the sale.
And here is the part founders often miss: only about 9% of free accounts convert to paid across all models, according to ProductLed’s benchmark data from over 600 SaaS companies. The best performers achieve dramatically higher numbers, but they do so through deliberate activation strategies, not passive hope.
Does PLG mean I don’t need a sales team?
I believe this is the major misconception in the PLG world lately — and a revelation of the day for some people: PLG and Sales are complementary, just like marketing strategies!
McKinsey’s survey of 625 SaaS buyers across five software categories found that 65% strongly prefer both sales-led and product-led experiences when purchasing a solution. Not one or the other. Both.
The idea that PLG doesn’t need sales teams has been debunked by companies that have actually built and scaled in a PLG environment. Over 60% of PLG companies add sales teams within two years. Even Atlassian, the poster child of “no sales team”, now runs enterprise sales.
Elena Verna says that PLG does not replace marketing and sales; it works as an accelerator for scalability and efficiency in both functions. In practice, most successful companies blend sales-led, marking-led and product-led strategies.
The industry has been moving toward a hybrid model called Product-Led Sales (PLS). Basically, using a bottom-up approach (traditional PLG) to generate demand and qualify users through product experience, but scaling with a top-down approach (Sales-Led) by attaching a sales function to close larger contracts and serve enterprise needs.
Wes Bush framed the PLG strategy as “serve before you sell”. And, honestly, it is a brilliant approach! It decreases demand for customer service, improves product desirability by demonstrating value before sales, and creates a natural path for adoption and retention. Sales in PLG feels like a natural path for users; it is a complementary solution used in a smarter way.
So, how does PLG actually work?
As I mentioned before, PLG touches product, marketing, sales, customer success, engineering, and finance. It is a fundamental shift in how the entire business operates.
Let’s go step by step, with a condensed overview to give a sense of what PLG is and how complex it can be — and how aligned with Product Designer services it is.
1. Start with a good foundation
Whatever framework you use, the foundation is the same: know your market, understand the problem better than your competition, and craft an offer that is impossible to refuse, providing true value to your users. It sounds simple, but there is a lot of work in it!
As a Product Designer, this is the key point: heavy user research shapes the entire product vision and sets the right strategies, too.
2. Design for self-serve value
The self-serve concept doesn’t mean “zero support”. It means easy to use, faster to adopt.
Your product experience should be the core priority of your business. Your users should feel the value faster. So, their experience should be intuitive and provide real solutions for their needs. Here is where the product design services shine the most, and they are based on extensive user research to make your product not only viable but desirable.
Onboarding in your product is not only about teaching users how to interact with it or making them aware of its latest updates, but especially about helping them see the true value of what you offer more quickly — what is commonly referred to as the “Aha Moment”.
3. Measure what matters
This is a critical point, and often neglected. Measuring the success of your process to iterate on the product in a user-first approach.
According to ProductLed’s benchmarks, only 34% of PLG companies consistently track activation metrics. That means 2 out of 3 companies pursuing a product-led strategy are not measuring whether users actually reach the value they promised.
Tracking data is fundamental to product iteration.
Track activation. Track time-to-value. Track where users drop off. Track product-qualified leads. Without these metrics (and others), you are guessing. And probably it will block you from scaling.
4. PLG is a teamwork
A North Star is important, but tracking specific metrics that impact different departments is a next-level approach for success.
Insight Partners calls cross-functional alignment failure the number one cited reason PLG efforts stall. Product, marketing, sales, and customer success need to operate from shared data and shared goals.
As Miro’s CEO has described, PLG is a complex cake where product, marketing, sales, and success are layered together. You cannot extract one ingredient and call it the recipe.
5. Growth in loops
The Pirate Metrics framework (AARRR — Acquisition, Activation, Revenue, Retention, Referral) is a type of PLG funnel widely used and valuable in many cases, but the most successful PLG companies often use flywheels for customer lifecycle, where growth loops of satisfied users generate new evaluators who become advocates and represent the growth machine you create better.
What should a founder actually do first?
Founders know their vision, understand the market, and can usually spot opportunities by comparing their product to the competition. But often neglect user research.
Stop guessing. Work on gaining a deep understanding of your users.
Users will share their expectations and which solutions are missing. Users will tell you what they value most and what is working, or not. Users will provide the data to guide your pricing strategy, onboarding decisions, and product experience.
Without users, there is no revenue. All other strategies follow from them.
This is exactly what I am working on with the client I mentioned at the beginning of this article. We are focusing on users because, in a product-led approach, they are the priority. And based on those findings, every strategy will be developed for them.
Further readings
Wes Bush, Product-Led Growth: How to Build a Product That Sells Itself (ProductLed Institute, 2019) — productled.com
McKinsey & Company, “From Product-Led Growth to Product-Led Sales: Beyond the PLG Hype” (Mina Alaghband, Nina Panagiotidou,Paul Roche, and Jeremy Schneider, 2023) — mckinsey.com
Elena Verna, “Product-Led Growth Is Many Things. But Here Is What It’s NOT.” — elenaverna.com
Elena Verna, “Not All B2B Companies Should Be Doing Product-Led Growth” — amplitude.com
ProductLed, “Product-Led Growth Benchmarks” (600+ SaaS companies surveyed) — productled.com