Little Glossary · Go-to-market
Product-led growth (PLG)
Product-led growth (PLG) is a growth strategy in which the product itself is the main channel to acquire, convert and expand customers: users try it for free or with little friction, see its value and then pay or roll it out to their team.
Origin
The term was coined by Blake Bartlett of the venture fund OpenView Venture Partners around 2016, to describe the growth of companies such as Slack, Dropbox, Zoom and Atlassian, which spread inside organizations starting from individual users.
Common models
- Freemium: a free version with no time limit and limited features or usage.
- Free trial: full access for a number of days, with or without a credit card.
- Reverse trial: users start with every feature and, when the trial ends, drop to the free version unless they pay.
- Product-led sales: free usage generates signals the sales team uses to reach out to the accounts with the most potential.
Key metrics
- Time to value: how long it takes a new user to get their first useful result.
- Activation: the share of sign-ups that complete the action that predicts retention, such as inviting a teammate or creating a first project.
- PQL (product-qualified lead): a user or account whose usage signals buying intent.
- Free-to-paid conversion and revenue expansion within each account.
When it fits and when it doesn't
It fits products that are understood and deliver value without help, with a low entry price and users who can start without asking permission. It fits less well with products that need complex integration, buying decisions with many stakeholders or very large contracts, where it is usually combined with a sales team (sales-led or hybrid models).
The role of the website
In PLG, the website and onboarding do the job a salesperson does in other models: explaining value, answering pricing questions and driving sign-up. That's why pricing pages, comparisons and getting-started guides are often among the most important pages on the site.
Related terms
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