244. What does it mean to be PLG? 🙃
Defining one of SaaS's most popular terms -- without using the word "freemium" :)
Thank you for being part of this newsletter. Each week, I share playbooks, case studies, stories, and links from inside the startup marketing world. You can click the heart button 💙 above or below to share some love. And you can reach out to me anytime at firstname.lastname@example.org. I’d love to hear from you.
Links that are worth your time:
Hand-curated lists of the fastest-growing tech teams (useful for audience-building and prospecting)
Like Airbnb experiences but for virtual team-building events
New marketing podcast from the team at MarketerHire: Marketing Is Broken
And could you get by with only one internal meeting each week???
Hi there 👋
For all the content creators out there, I must say I’ve been loving the recent trend of award lists. Oyster was named to one the other day: Otta’s Rocket List of great startups to work for. The playbook is powerful — You create a list of companies or influencers that a fit a trend that’s important to your target personas, then you promote the list and encourage the people and companies on the list to promote as well. It’s like a modern version of the “Hear what these 15 experts think about X.”
If you end up making one this quarter, please do let me know. I’d love to check it out!
Wishing you a great week,
What does it mean to be PLG?
One of the hottest trends in tech is Product-Led Growth (PLG).
And as it goes with trends, an ironclad definition can prove evasive.
I experienced this at Buffer. We were doing PLG before the doctrine of PLG existed; we called it freemium or word-of-mouth or user experience. We went back and forth at Polly, too, drawing a distinction between high-touch sales-assisted revenue and the all-encompassing self-serve. We’re currently facing the semantic battle at Oyster.
We want to be PLG, but what does it mean to be PLG?
If you’re going to be successful with PLG, it is critically important to align all your stakeholders — marketing, product, growth, sales, etc. — on how you define PLG.
I’m happy to give you a bunch of definitions from the places I turn to for PLG expertise. Then I’ll weigh in with a mish-mash of my own. :)
Definitions for PLG
From OpenView Venture Partners:
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.
OpenView are the ones who coined the phrase PLG, so who better to turn to for a definition!
This blog post about PLG has permanent residency in my bookmarks. It’s a fantastic overview of the history of software and the birth of PLG. One of the main focuses for OpenView’s definition of PLG is the end user. I’ll quote a couple more paragraphs from the article:
For these users, the primary decision-making criteria is not “how will this product help the business’s bottom line?” but “how will this product help me in my day-to-day?”
Attracting and converting a large number of individual end users requires a scalable, bottom-up distribution model—one that leverages the user experience to empower end users to find, evaluate, and adopt the product on their own.
I also find myself referencing this section of the article on how to distribute your PLG product:
I don’t believe this list is 100% prescriptive. You can still be a PLG company if you hired sales first. But the ideas behind this distribution strategy are worth leaning into if you’re going PLG first or transitioning toward it.
Product-Led Growth is a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.
The team at ProductLed are the resident experts who have built out training programs, events, and a vast, vast education library to get people up to speed on PLG. Their definition of PLG puts the product at the center as the hub of your core business metrics. Along with that, ProductLed’s definition highlights a couple of key reasons why companies may go PLG:
Dominant growth engine
Significantly lower customer acquisition cost
The main differentiator of product-led growth is that it puts the product front and center of all go-to-market efforts. In product-led organizations, sales and marketing teams reorient to let the product (and the positive social proof it generates) take the lead.
Make a great product, let people try all (or part) of it before paying, watch it go viral
Very simply put, product-led growth (PLG) is a go-to-market motion that relies on a product (and its excellent user experience) to drive a company’s growth and all its funnel stages. The app itself, rather than ad dollars or sales outreach, is the engine.
Clearbit also did a data analysis of the top 300 PLG companies out there, which further highlighted some of the characteristics and channels that PLG companies use.
PLG is a strategy through which your end-user product experience is the primary driver of growth at every stage of the funnel.
The Accel team also outlines a few principles of a PLG strategy worth considering:
Minimizing effort required for new users to receive value
Leveraging existing users to attract new ones
Optimizing purchasing experiences for self-serve
Defining success and informing decisions with product data
Establishing company-wide culture and practices
Product-Led Growth (PLG) is a go-to-market motion that focuses on the user experience as the key driver for acquisition, retention, and expansion.
PLG products are built to solve end-user pain. They accelerate time-to-value by minimizing friction. They achieve scale and efficiency by distributing where the users live and prioritizing growth and data.
Where a lot of companies get confused is in expecting a clear PLG playbook to fall out of the sky. There is no one-size-fits-all solution that can be applied across the board for PLG. That is both its beauty and its challenge. PLG can work for all kinds of businesses, but because of that, there is no single “right” way to do PLG.
Is PLG freemium? Only if that’s what the end user values.
Is PLG exclusively owned by your product org? Not at all. It is a company-wide strategy that all teams need to buy into. (And I’m biased, but I see a HUGE opportunity for marketing to contribute — especially product marketing, growth marketing, and content.)
Over to you
How do you define PLG?
What does it look like at your company?
I’d love more datapoints and to hear where I can improve my definition.
About this newsletter …
Each week, I share playbooks, case studies, stories, and links from inside the startup marketing world. If you enjoy what’s in this newsletter, you can share some love by hitting the heart button at the top or bottom.💙
I’m a marketing exec who specializes in startup marketing and brand-building. I currently lead the marketing team at Oyster (we’re hiring!). I previously built brands at Buffer, Polly, and Vox.
Not subscribed yet? No worries.
I send a free email every week or so. You can check out the archive, or sign up below:
Already subscribed? You’re in good company …
I’m lucky to count thousands of subscribers as part of this list, including folks from awesome tech companies like these:
Thank you for being here! 🙇♂️