The No-BS Guide to Product-Led Growth in 2025
Product-Led Growth (PLG) means different things to different people. To some, it is optimizing a survey for minimal personalization in emails and in product., To others, it is a deeply architected part of how a product is built and creates loops of users engagement. But if you are a SaaS company and you’re not already exploring it, you’re likely falling behind. I’ve seen it work wonders and seen it crash and burn. Here’s an overview of what it is, how it can work and pitfalls to avoid.
What is PLG? The Basic Definition
What PLG Is:
PLG is a go-to-market strategy where your product itself is the primary driver of customer acquisition, conversion, and expansion. Think of it as your best salesperson, available 24/7, tirelessly demonstrating value directly to your users. It’s about letting users experience the "aha!" moment organically and then guiding them to become paying customers and the product itself being built in a way to create ongoing value and stickiness for its customers. It should create some type of network effect where the product itself becomes a referral or marketing channel to bring in new customers.
Companies like Calendly exemplify this – you try it, you love it, you pay for it. Your network will see it as it is embedded in your workflows when they book meetings with you and will think ‘hey, why am I still going back and forth setting up meetings the old fashioned way?”.
What PLG Isn’t:
PLG isn't just offering a free trial. It's not simply "product marketing" or throwing a few onboarding emails at a new user. It’s not an excuse to neglect sales or marketing; rather, it’s about integrating your product into every stage of the customer journey. And critically, it’s not just layering on third-party tools (like Pendo messages) instead of making your core product more intuitive. (Not that there is anything wrong with Pendo, I’ve used them at two different companies).
Today’s PLG Companies Aren’t Feeling Good About What they Are Doing
Here’s the dirty secret: most companies doing PLG aren’t doing it wellt. Gainsight found that only 26% track activation rates, and just 17% track time-to-value. Translation: 3 out of 4 companies are basically flying blind. Appcues reported that while 97% of SaaS companies are “investing” in PLG, only a third believe their product actually delivers the experience users need. That’s like 97% of people joining a gym, but only a third ever touching the treadmill.
A (Very) Brief History on the FlyWheel and Product Led Growth
PLG didn’t start with Figma or Slack. It goes back to Jim Collins’ “Flywheel Effect” from Good to Great in 2001. Amazon took it mainstream with their FlyWheel: lower prices → more customers → more merchants → bigger store → more revenue → even lower prices. Wash, rinse, repeat.
SaaS leaders basically co-opted that model and said, “Cool, let’s turn the funnel into a loop.” Below is an image from the Product Led Growth Collective with how most modern folks think about PLG.
Where Most Companies Start with PLG: Get Customers into the Product with Some Version of ‘FREE’.
Free stuff is not a new concept or unique to SaaS. I once worked in event marketing and sampling what a huge component of what we did. Remember Columbia House CDs? (12 for a penny, until you forgot to cancel and got billed $25.99 for that Creed album.) Freemium SaaS isn’t all that different.
There are generally two approaches:
Freemium: Offer a core set of features for free forever, with premium features requiring a subscription (e.g., Spotify, Wave, Zoom, Gmail).
Free Trial: Give full access to the product for a limited time (e.g., Adobe Creative Cloud, FreshBooks, Aha!).
Next Up in the PLG Journey: Get The Customer to the AHA Moment
The “aha!” moment is the magic spark where users finally get it. At Slack, it was sending enough messages. At Canva, it was designing something share-worthy in seconds. If you can’t identify your aha moment, you’re basically throwing darts blindfolded. Get to understanding what actions are driving customers to convert. You don’t want to force customers to take these actions, but you do want them to figure out how to product provides that value.
Expand Your PLG to Your Existing Customers
The hardest (and most lucrative) PLG move isn’t getting new customers—it’s getting your current ones to go deeper. Think: Slack expanding team-by-team until the whole company has no choice but to pay. Or iPhones sneaking into enterprises through employees before IT gave up and said, “Fine, we’ll support it.” If your product doesn’t create these network effects, you’re just renting users instead of compounding growth.
Building in elements that drive some sense of virality or network effect in your product is an essential element to growth. Building in natural ways for your customers and their network to extend your flywheel is truly achieving PLG.
What Makes PLG Work?
This isn’t magic. Well, maybe it is slightly mystical. But it is also just a strategic shift that requires a specific mindset and foundational elements.
The Six Foundational Elements of PLG:
🧠 Mindset: If leadership still sees “product” as an engineering cost center, you’re toast.
📊 Data: Flying blind = crashing hard.
🧪 Testing: Don’t play guess-and-check with millions of ARR on the line.
📈 Volume: PLG without traffic is like running A/B tests with your mom as the sample group.
👥 Team: You need dedicated pods with Product, Marketing and Tech. Not “Friday growth brainstorms.”
😁 Ownership: Get one clear owner in your company who is directing the cross-functional team.
How to Operationalize PLG in Your Company
Let's break down how to actually do this.
Breakdown of Funnel Points and Build Your PLG flywheel:
Attraction: How do users discover your product? (SEO, content, word-of-mouth).
Consider: What makes them try it? (Free tier, compelling value proposition).
Convert: What prompts them to become a paying customer? (Feature limits, time limits, clear value unlock).
Onboard: How do you get them to their "aha!" moment quickly and successfully?
Engage: How do you ensure continued use and habit formation?
Expand: How do you drive deeper usage, feature adoption, or upgrades?
Tell: How do you encourage them to share their positive experience? (Referrals, testimonials).
Stay: How do you minimize churn and maximize retention?
What will drive the Flywheel will take hypothesis, iteration and design. It may be one thing or it may be a set of things that you find help drive people back to your product.
Competitive analysis/benchmarking:
Are you at parity with your competitors? If Miro offers an incredibly smooth onboarding and collaborative experience, and your equivalent product is clunky, you’re already behind. Understand what others are doing right and where their gaps are. I was at a company where our product was 300% more expensive than our competitors. No amount of PLG is going to overcome some obvious challenges of being competitive.
Identify the biggest area of concern:
Where are users dropping off? Where's the friction? Is it activation? Conversion? Retention? Don't guess; use your data.
Identify the biggest areas of opportunity:
Where can a small change have a disproportionately large impact? Often, this is early in the user journey – improving activation can unlock huge downstream gains.
Build hypothesis and a test plan:
Based on your concerns and opportunities, formulate a clear hypothesis ("If we simplify Step 3 of onboarding, then activation rate will increase by X%") and create a detailed plan to test it.
Here’s an example of a company doing it well: Canva. Their onboarding is practically non-existent because the product is so intuitive. You can start creating something beautiful within seconds. Their "Attraction" and "Consider" phases blend seamlessly into "Onboard" because the product itself is the core experience. On the flip side, I’ve seen companies with incredible products fail at PLG because their onboarding is a labyrinth of pop-ups and feature tours, obscuring the actual value proposition. They're telling, not showing. This isn’t as easy for products that are more complex or require data to see value, but the goals is to get the customer to see them using the product, not running their entire business on the first try.
How to Start Your PLG Journey
Don’t get overwhelmed. Start small, get wins, and build momentum.
Start small and focus the team consisting of product, technology and marketing:
Pick one specific, measurable problem. A classic starting point is improving your activation rate for new sign-ups. Get a dedicated, cross-functional team (product manager, engineer, marketer, data analyst) to own this.
Don’t try to boil the ocean, pick something and go with it:
Trying to redesign your entire funnel at once is a recipe for disaster. Focus on one bottleneck, design a minimal viable test, and launch it.
Iterate fast.
Don’t try to constantly go for perfect tests, you don’t have enough traffic to support that: This isn't about achieving statistical significance on every single micro-change, especially in the early stages. It's about learning. Run rapid A/B tests, analyze the directional data, and then build on what works. Get something out there, learn, and improve. Aim for progress, not perfection.
Imagine you're trying to optimize the first 5 minutes of a user's experience with your new project management tool. Instead of designing a perfect 10-step onboarding flow, you might simply test two different welcome messages or the placement of a key "create project" button. See what resonates, then iterate. This rapid iteration isn't just about speed; it's about building a culture of continuous improvement.
Pitfalls to Avoid in Adopting PLG
This is where I’ve seen many good intentions turn into wasted time and money.
Getting stuck on one thing thinking it will be the silver bullet (for example, onboarding surveys)
Yes. The dreaded onboarding survey. While useful for gathering customer data, it’s not a PLG strategy unto itself. Relying solely on surveys or a single feature fix to drive growth is like trying to fix a leaky boat with a single piece of tape. You need to build the overall strategy and work your way across customer engagement points. I've seen teams spend months trying to perfect an onboarding survey, only to realize that the real challenge what they they couldn’t see the value in the product.
Spending too much time getting to statistical significance on a test, only to lose 6 months of time
This is a classic analytics trap. While statistical rigor is important, in the early stages of PLG, waiting for perfect statistical significance on every small test can paralyze your team. If you have limited traffic, a clear directional improvement is often enough to justify iterating and moving on. Don't let academic purity kill your momentum. A "good enough" signal now is often better than a perfect signal 6 months from now, especially if that perfect signal reveals the opportunity has passed.
Layering things on top of the product while not creating a better and more intuitive experience in the product
This is perhaps the biggest sin. Tools like Pendo, Intercom, or Appcues are valuable for targeted messaging and feature adoption. But they are supporting tools, not substitutes for a well-designed product. If your product is confusing, difficult to use, or doesn't deliver value effectively, no amount of in-app messaging or guided tours will fix it. You’ll just be putting lipstick on a pig (which is actually quite hard to do). Focus your energy on making the core product so intuitive and valuable that users don’t need constant hand-holding. If your users constantly need to be told how to use a feature, that feature isn't product-led. It’s product-hindered.
In Summary: Do It. If You Don’t Do It Perfect, You’re In Good Company
PLG isn’t a silver bullet or a quick fix. It’s a strategy, a mindset, and a discipline. If you want to win in 2025, stop treating your product like a cost center and start treating it like your best salesperson. Get small wins, iterate relentlessly, and remember: your product should be so good that people feel stupid not paying for it.