Product-led growth means the product itself drives acquisition, activation, and expansion—users can try/buy without talking to sales. Freemium models, self-serve onboarding, and viral features enable PLG.
PLG flips traditional sales model: Instead of sales team qualifying leads, the product qualifies itself through free trial/freemium. Users experience value before paying (vs being sold). PLG characteristics: (1) Self-serve signup (no sales call required), (2) Free trial or freemium tier, (3) Instant product access (no setup needed), (4) In-product upsells (upgrade prompts when hitting limits), (5) Viral loops (invite teammates). PLG flywheel: Free users try product → Experience value → Upgrade to paid → Invite teammates → More free users. Examples: Slack (free for small teams, paid for features), Zoom (free 40-min meetings, paid for longer), Dropbox (free 2GB, paid for more), Figma (free for 2 editors, paid for teams). PLG metrics focus on: Time to value (how fast do users experience "aha moment"), Activation rate (% who complete key action), Free-to-paid conversion (typically 2-5%), Expansion revenue (upsells from existing customers). PLG requires strong product (product must sell itself), low friction onboarding (0-3 clicks to value), clear upgrade path.
Perfect PLG. Free for unlimited users, paid for message history/integrations. Users invite coworkers (viral). 30% of paid revenue comes from self-serve upgrades (no sales involvement).
Free scheduling tool. Every email invite is marketing (recipient sees "Powered by Calendly"). Grew to $70M ARR, 10M+ users with minimal sales team. Pure PLG.
Complex enterprise product tried PLG (self-serve). Too complicated for self-onboarding, users got confused, high churn. Needed sales-led instead.
PLG dramatically lowers CAC (product is your sales team). Sales-led CAC = $5K-$50K. PLG CAC = $100-$1K (10-50x cheaper). PLG companies grow faster with less capital. Ideal for SaaS wanting to scale efficiently.
No. PLG works for: Simple products, SMB/developer tools, high-volume customers. Sales-led works for: Complex products, enterprise (6-figure deals), customization needed.
2-5% is normal. Slack/Zoom: ~5%. Most PLG SaaS: ~2-3%. Below 1% means free tier is too generous or product isn't delivering value.
Yes! "Hybrid" model common. PLG for SMB self-serve, sales team for enterprise deals. Calendly, Zoom, Atlassian all use hybrid approach.
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