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The Product-Led Growth Spectrum

Is PLG binary?

Alexa Grabell
November 22, 2022
The Product-Led Growth Spectrum

When most people think of PLG, they think of companies like Slack, Calendly, and Dropbox. These once-in-a-generation viral companies that create or redefine their categories with end-user-focused, easy-to-implement, and adopt products. But, as we talk to more companies in the Product-Led Sales community, we’ve learned that pure-play PLG rarely works for most SaaS businesses.

We already know from last year's Product-Led Sales survey that 97% of PLG businesses either have or plan to add a sales team. Purely PLG is rarely ever the only growth motion.

The reason?

  1. Your product doesn’t fully meet the criteria to sustain a self-serve PLG motion.
  2. You have reached the limits of what your self-serve PLG motion can do on its own, and you are now looking to bend the s-curve again.

This is why I’m starting to view PLG companies on more of a spectrum, where we assess their go-to-market motions differently depending on where they sit on the PLG spectrum.

Here are the characteristics I’m using to grade companies and categorize where they fit on the spectrum. OpenView also has a helpful rubric they use to grade PLG companies that you can find here, but below is my simplified take.

#1 Natural virality or network effects.

This is really a core tenet of PLG - natural virality. It’s a product that is shareable with your team, the service gets better when more of your team joins, it’s so good you want to tell your friends and colleagues.  

#2 End user as the buyers.

For pure-play PLG this is a must. Your end user must be able to swipe a credit card to get started quickly with your product. If the end user always has to pull in an authority with buying power, PLG may not work.

#3 End user-focused onboarding.

The product is inherently single-player and doesn’t require multiple personas for onboarding and getting to value quickly. This does not mean it is forever single-player. Many single-player products have network effects that make the product more valuable as more team members join. The difference is those team members joining is not required for a single user to get value.

#4 Frictionless experiences.

PLG products are successful because of their emphasis on frictionless experiences, especially when it comes to onboarding & implementation. If getting to experience value requires calling IT to connect a tool - pure play PLG is out of the question. This extends to everything from the support process to payments and billing.

#5 Product-centric go-to-market strategy.

Go-to-market is built around the product's ability to acquire, retain and expand customers. This means self-serve onboarding, product usage metrics that inform both product and GTM teams, and the ability to run experiments.

#6 Average contract value.

When costs are low, it’s very easy to swipe a credit card and self-serve onto a product. As your ACV gets higher or you move upmarket into the enterprise, customers are less willing to take a purely PLG route, they almost always need to speak to a salesperson and involve finance or procurement.

If you read this and think I can perfectly hit all 6 of these characteristics, congratulations! You might be able to scale (at least initially) through an entirely self-serve/pure PLG motion.

10-2

I suspect that most of you will be able to hit 50-60% of these characteristics and that might mean that PLG drives your land, but you need sales to help you convert and expand through a Product-Led Sales motion.

If you look at this and think, “I can only hit 10-20%” of these characteristics, then you might be in the part of the spectrum I’m calling sales-led product accelerated. Where you are mostly driving a sales-led process but using key tenets of PLG to create more frictionless experiences or finding ways to bring product experience earlier in the user journey through sidecar apps or interactive demos.

11

Not all PLG companies are created equal and we need to segment them so we can all accurately benchmark our growth compared to the "PLG darlings."

As I was researching companies for this, I noticed that many traditionally sales-led organizations were beginning to adopt a PLG flare. Some are genuinely trying to become as product-led as they can possibly be, while others are just masquerading to capture the hype. What that signals overall is that the definition of what is PLG and Product-Led Sales is changing.

But that's probably an entirely different newsletter.

Let me know what you think by joining the conversation in the community.

Alexa Grabell
Co-Founder & CEO at Pocus
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