What is Product-Led Growth? | Definition and Examples of this rising Business Strategy

What is Product-Led Growth? | Definition and Examples of this rising Business Strategy

We are in the midst of a massive shift in the way people use and buy software.

The SaaS revolution kicked off over a decade ago when Salesforce brought business apps to the cloud. Then the iPhone came along in 2007 and put powerful digital experiences right in people's pockets.

In the years since, the market has been flooded with consumer and B2B products promising to meet every need under the sun. The problem is, that yesterday's most exceptional product experiences just don't excite anymore—they're the bare minimum users expect.

This shift goes beyond the consumerization of the enterprise. Today's buyers have an "experience first" mentality shaped by the intuitive apps and on-demand services they use in their personal lives. They expect software to be frictionless, personalized, and delightful right out of the box. No lengthy demos, complex configurations, or drawn-out sales cycles are required.

So how can companies meet these new expectations and stay competitive?

The answer lies in making the product itself the star of the show through a strategy called product-led growth (PLG).

What is Product-Led Growth?

Product-led growth is a business strategy where the product is the main driver of user acquisition, expansion, conversion, and retention. Instead of relying heavily on sales and marketing, a PLG model puts the product front and center to attract, engage, convert, and retain users.

With PLG, your product demonstrates its own value and essentially sells itself. The goal is to get users actively using and loving your product as quickly and seamlessly as possible. Happy users then organically share it with others, fueling viral adoption and growth.

PLG creates alignment across teams, with engineering, design, sales, marketing, and customer success all rallying around the product to enable this viral motion. No single department owns the customer experience. Instead, the product becomes the vehicle for delivering an exceptional experience at every touchpoint.

To picture how PLG works, imagine a prism splitting white light into a rainbow. The different colors are cross-functional teams, normally operating independently. With PLG, the prism brings them together into focused light powering growth. Pretty cool right?

PLG does not mean product rules at all. It's about aligning teams to build better, stickier products—not an autocracy. Like any democracy, PLG needs diverse perspectives and open communication to make the best decisions. More voices at the table lead to better innovation in the long run.

The alternative is endless hiring to meet customer demands. This results in bloated costs, sluggish operations, and poor margins. PLG provides a capital-efficient model to scale quickly and drive revenue.

What is an example of Product-Led Companies?

Let's look at some real-world examples of successful PLG models:


Slack's meteoric rise proves the power of product-led viral growth. Their freemium model focuses on delivering a seamless user experience. Thanks to intuitive design and seamless integrations, Slack spread like wildfire. Now over 169,000 paid organizations use Slack worldwide.


During COVID-19, Zoom became the video platform that kept the world connected. But even before the pandemic, Zoom was winning users with their ridiculously reliable, easy-to-use product. Frictionless onboarding and a generous free tier accelerated their viral adoption.


Dropbox pioneered simple, seamless cloud storage with its freemium model. Rather than traditional promotion, Dropbox grew through word-of-mouth referrals, earning millions of loyal users.

PLG is also powering growth for companies like Airtable, Figma, Canva, Calendly, and Notion. Both B2B and B2C businesses leverage PLG strategies with great success. The unifying thread is a phenomenal product experience that hooks users and incentivizes sharing.

PLG as a Go-to-Market Strategy

PLG transforms your entire go-to-market strategy by putting the product at the forefront. Like any GTM, PLG provides a company-wide blueprint for how teams measure and drive growth.

A strong GTM strategy clearly defines:

  • Who is buying your product
  • Where they discover it
  • Why they buy it
  • How they buy it

With PLG, the answers are:

  • Who: Users, not buyers
  • Where: Virality, word-of-mouth, and product-led discovery
  • Why: Your product provides more value, better UX, and solves real problems
  • How: Self-service, product-led onboarding and conversion
Evolution of Public PLG Companies Since 2012

PLG companies use freemium models to get users direct hands-on access. This allows the product itself to demonstrate value, rather than sales and marketing. Users can kick the tires extensively before buying.

If you need help to replace your GTM strategy with PLG, at Gobvio, we have a team of experts ready to listen to your needs and get hands-on with a new marketing strategy that fits your business's unique qualities. Book a free discovery call here!

With PLG, your flywheel spins faster. The top of the funnel widens exponentially early on. This puts pressure on your product to clearly communicate and deliver on its value proposition quickly. But done right, PLG provides both scale and organic growth.

How to become Product-Led?

Transitioning to PLG involves two key transformations: in your product and organization.

First, you need a stellar product that delivers immense value quickly. Build with the end user's journey in mind, not features. Identify pain points and eliminate friction obsessively. Make onboarding intuitive and centered around user goals. Monitor bottlenecks with tools like Heap Analytics.

Second, align your organization around the product and user-centricity. Break down silos and rally teams around enabling product-led experiences. This will require changes in mindsets, workflows, and KPIs. But the end result is worth it—empowered teams moving with speed and purpose.

PLG maturity occurs in stages, not overnight. But you can inject more PLG DNA into any business. Start by enabling your product to better support self-service and viral loops.

We talked about how to implement a PLG strategy into an existing Saas business in our latest Episode of The Revenue Table Podcast. If you want actionable steps by steps on how to build and monetize your business without a sales team, you have to listen to this episode!

What are the core metrics for a Product-Led Growth Strategy?

The core metrics for a Product-Led Growth Strategy are:

  • Activation rate: Percent of users who experience core product value
  • Adoption rate: Percent who actively use the product post-onboarding
  • MRR/ARR: Monthly/Annual Recurring Revenue
  • Monetization rate: Average revenue per user
  • Retention rate: Percent of customers retained month-over-month
  • Virality/Network effects: How users beget more users
Product-Led Growth Metrics

PLG also relies heavily on the flywheel model rather than traditional funnels. The flywheel better captures the viral motion and compounding effects inherent to PLG.

What are the benefits of a PLG Strategy?

Transitioning to PLG requires substantial upfront investment and fundamental changes. But the payoff can be immense:

  • Lower CAC: Virality and word-of-mouth reduce acquisition costs
  • Higher efficiency: Product drives self-service reducing overhead
  • Faster growth: Viral product-led motion compounds quickly
  • Improved margins: Lower overhead and higher LTV boost profitability
  • Innovation: Consumer-grade user focus leads to better products
  • Team alignment: PLG rallies everyone around the customer
  • Organic moat: Network effects and virality make you hard to displace

Investors love PLG models for their capital efficiency and scalability. But the greatest benefit may be the customer-centric culture PLG instills.

Wrapping up

In the end, PLG is about letting your product take center stage and amaze users. Building a product experience so frictionless, delightful, and valuable that it essentially sells itself is no easy feat. But for companies that leverage PLG to its full potential, the rewards are game-changing.

The future is product-led. Is your company ready to embrace it?

How your company structure and organize internally will determine if you scale properly or if you drown in the sea of competition. Check out our blog on how to structure for a successful scale-up.

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