How To Approach Product Led Growth ~ PLG stack

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Together Fund

8 min readDec 16, 2021

We spoke about how to approach Founder-Led Sales before you hit PMF in the last edition. But what if you have a product that sells itself? Yes, we are talking about the hype of the town — Product Led Growth motion. How does one approach this? What tools would you need to succeed? To understand at a deeper level, I spoke to Cristina Cordova — who has lead Channel and Partnerships at Notion (Ex- Stripe, Pulse) and Gaurav Sharma, Founder and CEO at JustCall (bootsrapped to $5Mn revenue and recently raised a $17Mn Series A)

Let’s deep dive into the learnings →

But first, what is PLG?

Product led growth (PLG) is an end-user focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion and expansion. Many of the fastest growing software companies are adopting the bottoms up sales motion as a growth hack to enter into big accounts. Product led motion is more than a freemium service, you need to keep it tempting enough for the user to pay even after they are able to derive some value out of the tool free of cost.

Nonetheless, I feel like the 8th husband of Elizabeth Taylor as I spend the next few seconds explaining why PLG motion is the way to go when the supply of tools is greater than the demand. Let us quickly see why PLG has been gaining traction. Openview partners has been the one to write extensively on the topic and would like to highlight some interesting statistics below:

Today, there are atleast 21 large public companies with a PLG model. That number continues to rise as more PLG companies IPO each year. Some of those Product-Led organizations are Zoom, Datadog, Slack, Fastly, Pagerduty, Elastic, Surveymonkey, Pluralsight, Smartsheet, Docusign, Dropbox, Twilio, Atlassian, Shopify, New Relic, Hubspot, Freshworks and others.
According to a 2018 Forrester survey, 70% of B2B buyers find buying from a website more convenient than buying from a sales representative.
PLG companies perform better than their peers post-IPO → product led businesses grow faster at scale. While growth may be comparatively slow in the early days, PLG companies hit the $10M ARR mark, they tend to scale faster than their peers.
Median enterprise value (EV) of PLG companies is 2X higher than the public SaaS index as a whole. (very famous graph below)

Figure below : Traditional vs New customer Acquisition process

The future of SaaS is product-led. The fastest-growing SaaS companies with the highest public market multiples are getting the best out of this growth motion. Strategies like bottoms-up adoption, self-service, freemium and free-trial are mainstream today and the majority of SaaS founders are building towards it.

What changes in PLG motion is that the atomic unit that moves your sales funnel shifts from a few macro accounts to many micro accounts. In the traditional model there is a lot of human touch involved — a client requests for the demo, speaks to the sales team, signs the contract, undergoes onboarding and implementation.

While in PLG, we are focusing on two things:

Minimizing the friction of onboarding, and
Delivering instant value → A journey where a user ends up on your website if your keyword game is strong.

The customers signup on your portal, enter credit card details (sometimes maybe not!), go through an automated onboarding, knowledge repository and if you do it right and if they find value in it, they would be hooked. The onboarding, pricing, user experience, value creation — everything works together to carve out a successful strategy.

As Adam Schoenfeld rightly says — Nobody wants to jump through a bunch of hoops just to see the product or price. Not all b2b will be product-led growth. But everything is moving to buyer-led. If the sales process is designed around the vendor’s desires (qualification, measurement, price maximization), buyers will just go somewhere else for their SaaS. Supply is infinite, demand is scarce. I’ve never met a buyer who prefers to dance for a quote. If you compete with PLG companies, the pressure goes this direction.

But, what does data tell us?

We like data and we ❤️ insights. To understand what has truly been happening in the PLG space, we (with the help of DataNarrative) macro analyzed ~500 PLG companies to understand how do they really function. What does their org structure look like? What kind of a pricing plan do they adopt? Sharing a few insights below:

**Insights from analyzing ~500 PLG companies**

Companies that rely on free plan are hiring ~35% faster than companies offering limited free trial
Data focused PLG companies are doubling down on the sales employees as well and has seen a 22% growth in sales teams. Cannot resonate more with PLG and Sales — A Powerful, One-Two Punch!! 🤯
Content focused companies are most aggressive while hiring while companies in the data stack are the slowest
While naturally, Data focused teams have ~1.3x less marketing employee strength than the Content focused teams
We could not find any correlation between the pricing pages for different companies (we will spend more time finding what works and what doesn’t)

To understand more about what the tags are mapped to and to access the PLG list. Click here📜.

So lets talk about how to get started 😃

As Despina right says here that a Product-Led growth GTM strategy puts the product at the center of the organization. Product-Led organizations deliver products that anticipate and answer customers evolving needs. They achieve that by delivering stellar, customer-centric product experiences. We have put across a comprehensive set of tools that you can use to get started. We have tried to think through different requirements that an early stage startup adopting a PLG motion will need.

🎯 Build with the end user in mind.

The first step toward product led growth is to build a product for end users — not for competitors, not for shareholders, not for the press, and not for yourself or your team. The software development process should be designed with the end user as the primary driver of what gets built and what gets left out. This may sound obvious, but it’s not how things work at most companies. There are multiple tools such as Betafi, UserTesting, Uservoice that can help you conduct user research interviews.

✈️ Find out ways to reach your users

Investing in a SEO/ Inbound strategy is a must if your customers are searching for products like yours online. Starting early is key here as it takes 3–4 months for SEO to kick in and you might lose precious time if you don’t do it at the right time.

📱 Invest in Product analytics and Customer Success

There are a range of tools now available that allow you to do this today. Understand the user journey i.e where they dropped off, feature usage, etc to get a grip on what is working and what is not. Understand the churn statistics and focus on customer success till the month of churn drop. You can’t improve what you can’t measure. A fact also supported by “The State of Product-Led growth” a recent research Openview conducted, where it was proved that 80% of companies have adopted in-product tracking and analytics.

🪜 Eliminate barriers to entry, focus on onboarding

As discussed earlier, this is usually done by providing a freemium model that can deliver instant value to the end user. There are lot of tools available that help with self onboarding, with creating personalized demo experiences for the audience — make sure you try out some of them to see if they fit your needs.

🔗 Feedback Loops

If you’ve built something great and kept it fresh, the next step is to figure out what people want from your product. What do they need? What can you build for them? What do they want to do with it? If you’ve done a good job of listening, there are now some clear things that people want from your product. Then comes the hardest part: deciding what to build next. (10% of the top 500 PLG companies are generating > 100 reviews on the platforms). Pre-feature launch feedback to post feature launch feedback to release notes — there are a bunch of tools that help you do this so that you are always on top of what is expected out of your product.

🗣 Focus on Virality

Organizations that invest in a product-led growth GTM strategy will have products which include virality components. Some of the ways to achieve virality are through user research, UX and UI design, product marketing, and building features that help with the growth of users within their networks. Slack, Intercom, Typeform, Calendly, Notion and many successful PLG companies have figured out the virality hacks beatifully. Read more here.

🔀 Track PLG Growth Metrics

Product Qualified Leads, Breadth of use, Depth of use, Efficiency of use and Frequency of use. Lot of tools have come up in the space to help you win customers. We invested in Toplyne and RevenueHero, who are trying to help companies find the needle in the haystack.

Tools that you can use

Similar to what we did in our blog on founder-led sales, we have created a map of tools that could be helpful in your journey of building your PLG stack. The tools mentioned here are not comprehensive and would love to hear from you on what we have missed and we will get them added (please write at dushyant@together.fund)

Additional Resources

BONUS READ — Few trends that we are seeing..

One of the new macrotrends we’re seeing is the emergence of roles at the intersection of departments, with the objective of just making things work (as an example: RevOps roles have been growing 300% in the last 18 months alone). Companies will never not have a MAP and/or a CRM and/or a Product Engagement solution and/or a data enrichment solution, etc… and yet, all of these systems don’t really talk to each other in an effective way. Also: it’s not about the GTM stack per se anymore, it’s about the data and how it’s acquired + stored + transformed + presented + secured. This is giving rise to a whole another PLG infra.
Rise of Data pipeline orchestration and breakout of the Reverse ETL category — to facilitate multi department collaboration, like auto prioritize tickets in Zendesk, automate invoices in Netsuite, integrating with HR or other payment systems.
Usage based pricing is picking up steam due to the rise of SaaS ‘Waste’ — an average company uses ~137 SaaS apps to function. The average amount wasted is $135,000 annually per company. We are hoping to see tools that facilitate and track usage based pricing for the companies. ~45% of SaaS companies are leveraging usage-based pricing this year.

~Dushyant Mishra