What is Product-Led Growth (PLG) and how to grow 240% with it
Product-Led Growth: such a complicated name for a philosophy we all come into contact with daily.
Product-Led Growth and Software as a Service are deeply connected. This method also empowers consumers and clients, serving as a small teaser of how the relationship between the two will look from that point on.
In today’s article, we’ll explore this relationship further, showcase other growth philosophies, and, at the end, give you a concrete example: how we achieved 240% growth using PLG.
I highly recommend reading the full context before jumping into our example. It touches on several concepts we cover more deeply throughout the article.
Everything ready on your end? Then let’s begin:
What is Product-Led Growth (PLG)?
Product-Led Growth (PLG) is a growth model that uses your company’s product as the main driver for customer acquisition and retention.
This model focuses on the end user of your solution, so from the very beginning of the buying process they already interact with the product—usually via a free trial or limited version.
Examples include Zoom and Slack, which are widely used in Brazil—and you’ve likely never had to speak to a sales rep to use or subscribe.
Over time, the market evolved from a Sales-Led Growth model (involving field sales and outbound leads), to a Marketing-Led Growth model (with inside sales and inbound leads).
Now, the market is going through another shift. PLG’s biggest advantage is its adaptability to this new era.
Let’s dig into that now:
What are the advantages of PLG?
Do you know what the fastest-growing SaaS companies in the world have in common? They noticed the B2B buyer profile is changing—and they adapted their sales processes to meet this new audience.
The new B2B buyer needs to try the product before committing to a purchase, avoids long-term contracts, and prefers to educate themselves about the product rather than talk to a salesperson.
This leads us to the rise of a new growth model: Product-Led Growth.
The main advantage of PLG lies in understanding what the consumer is expecting. When expectations are aligned, the product makes sense in context, and the sale becomes much easier.
The complexity of SaaS sales and the perceived value of the product directly affect the growth of companies working with this model.
The more complex your sales and onboarding process is, the harder it will be to close new clients. This difficulty is reflected in real terms through SaaS metrics like Customer Acquisition Cost (CAC) and Return on Investment (ROI).
So, it’s safe to say that a Product-Led Growth approach isn’t just about creating a simpler process overall, but a customized and independent one.
Prospects who see more value in advanced features of your product can go through one process. People looking for a fast and simple solution follow another.
This is the greatest benefit of PLG: the democratization of the SaaS sales process. And that democratization brings another huge bonus—cost reduction.
But where did PLG come from? What has its evolution looked like? Let’s talk more about that now:
What are the Types of Growth?
Product-Led Growth is the most popular Growth Marketing model among SaaS companies. It’s rare to find a digital product website that doesn’t offer some kind of direct contact with the product.
In fact, we have an article that dives into SaaS sales and covers the three most common approaches: Enterprise, Transactional, and Self-Service. Check it out:
➡️ The SaaS Sales Process: Build, Scale, and Profit!
Now that we’ve covered Product-Led Growth in detail, we also need to understand other models and how they differ.
It’s important to note that these growth models are, above all, business models. They determine how you acquire new customers, how and where you invest, and in many cases, even what tools you buy and your tech stack.
Let’s break them down, starting with SLG:
Sales-Led Growth (SLG)
Sales-Led Growth is a strategy where the salesperson is the main point of contact between prospects, customers, and the product.
This approach relies heavily on Outbound Marketing to generate leads, and on direct meetings with sales reps to close deals.
Companies that follow SLG depend greatly on these professionals and the teams supporting them. Through strategic efforts to identify SQLs—sales-qualified leads—reps receive a curated list of high-potential prospects to approach.
From there, it’s boots on the ground: telemarketing, meetings, educational materials—it’s all fair game, as long as the primary approach is sales-driven and led by human interaction.
We can think of PLG as an evolution of these other growth and acquisition strategies, but it’s essential to understand that these older strategies are still valid and widely used.
There are companies right now thriving with the SLG model—and PLG simply wouldn’t make sense for them. As the name suggests, Product-Led Growth requires a product-centric focus.
As you’ll see throughout this article, PLG is only viable when your company revolves around a product. If your business delivers many types of services or relies on human interaction, PLG might not fit your model easily.
Sales-Led Growth, for example, works well in strategic scenarios. As part of an ABM (Account-Based Marketing) strategy, for instance, SLG makes total sense—it’s hard to rely solely on inbound when your deals involve million-dollar contracts.
Marketing-Led Growth (MLG)
Marketing-Led Growth is quite different from SLG. It aims to build a marketing ecosystem, where the product is important but not the core of everything.
The product and its features matter—but the biggest emphasis is on brand positioning. Becoming a thought leader is the main goal for companies using MLG.
In that sense, MLG tends to be more guided than PLG. The marketing funnel, lead generation, and sales team interactions are more centralized.
PLG is relatively new. The top startups of the last decade began with a 100% MLG approach. Take HubSpot and its Brazilian counterpart, RD Station.
Their focus has always been on positioning themselves as marketing disruptors. Not necessarily because of their product, but because of their commitment to educational content, communities, events, and so on.
Are their products good? Absolutely! But growth for both companies came from generating demand, not just product usage.
More specifically: by fueling the digital marketing space—especially among beginners—both companies achieved massive growth and completely dominated the marketing automation market.
Again: the product is good, but growth was driven by marketing. Without it, the product would be interesting—but not revolutionary.
Hybrid PLG
Some companies in transition phases end up adopting hybrid PLG models based on their needs.
For example, a SaaS company that operated under Sales-Led Growth for years and is now transitioning to Product-Led Growth. It’s uncommon for the entire sales department to be shut down overnight.
What usually happens is that both departments operate in parallel for a while. Eventually, they diverge—with SLG continuing to serve Enterprise plans, for instance.
Similarly, hybrid strategies can be applied with Marketing-Led Growth. You can strive to become a reference in your industry while still focusing primarily on your product’s development.
And you don’t have to completely abandon key SaaS marketing metrics like lead generation, Lead Velocity Rate, or ad conversion rates.
However, hybrid models dilute some of PLG’s core benefits. Cost reduction, for example, becomes harder when you’re investing in two parallel tracks.
And when you split your team’s focus between two philosophies, you’re not truly maximizing the potential of either.
Hybrid models are transitional and experimental. Sooner or later, your company will need to make a decision. And if you choose PLG, follow the steps below:
Step-by-Step: How to Become a PLG Company
Becoming a PLG company isn’t particularly complicated—but it does require strong commitment and total alignment across the entire team.
Everything that looks simple on the surface is complex in execution.
The goal of Product-Led Growth is to establish a simple loop: Acquisition >> Activation >> Retention.
Up to now, we’ve seen that having the product at the center of this loop is crucial if you want to operate without the costs involved in other strategies like MLG and SLG.
But how does this actually work in practice? What strategies are necessary to create and sustain this loop?
Let’s explore that step by step:
Product-Focused Alignment
The first step is for the entire company to internalize PLG’s core philosophy: focus on the product. The second is to clearly outline your customer acquisition journey.
This can be tricky in companies that operated under SLG or MLG for many years. See the example below:
In previous models, marketing and sales teams have a lot of control over every stage of the sale.
In MLG, for example, Top of Funnel, Middle of Funnel, and Bottom of Funnel require different, intensive strategies. And that’s a simplified view.
In the PLG loop, the process is customer-centered. Most stages are completed by the user independently.
That’s why this internal alignment is so important. All those triggers for acquisition, activation, and retention fall on the product itself. While PLG is popular, it’s still quite specific in its requirements.
Set the Right KPIs and OKRs
The most common KPIs in SLG and MLG are tied to their own processes. Many of them don’t translate well to PLG.
For example: converting visitors to users is more important than converting them to leads. Leads still matter, but PLG is about generating users quickly.
You’ll need to track KPIs that truly support your product-first strategy. Here are a few examples:
- Activations: Not just how many signups you have, but how many users had an “Aha! Moment”—that is, performed key actions that demonstrate the product’s value. Example: an iFood user placing their first order.
- Retention Rate: How many users stick around and don’t uninstall? The more users you retain, the more successful your PLG strategy is. This ties directly to the next metric:
- Referrals: Recommendations must be tracked and encouraged. Users who share your product organically are essential.
- Viral Potential: Going viral doesn’t always mean exploding overnight. You can grow slowly within niche segments. This KPI measures word-of-mouth traction.
These are just some examples of PLG-related KPIs and SaaS metrics. You’ll need to choose the ones that best reflect your product’s reality.
Continuous R&D is a Must
Research & Development is what ensures your product keeps growing, retaining users, and attracting new ones.
This is especially common in the clearest PLG examples we see today—like GaaS (Games as a Service).
Many games only function as live service models. They require an internet connection and often launch with minimal content, with customers expecting regular updates throughout the product’s lifecycle.
If the updates don’t come, the product flops. And even in the SaaS world—where updates aren’t as constant or drastic as in gaming—they still need to happen.
Take iFood, for example. Since its launch, we’ve seen countless updates: real-time delivery tracking, in-app payments, PIX, chat with restaurants and delivery drivers, etc.
Uber too: it now includes food delivery, carpooling, various vehicle options, and even helicopters 🚁
Always Test and Gather User Feedback
Launching a product is a huge learning experience. First, you’ll learn the core PLG concepts in practice. Then you’ll start learning about your own product based on how people use it.
Actually, even before launch: one of the key stages of R&D is running constant tests—not only on the product, but on the business model.
PLG-focused companies hire people specifically for research—that’s the UX (User Experience) team.
They validate the product in its early stages through usability tests and interviews, and later through real-world usage data.
Constant development is at the heart of PLG. Products evolve because they have to. And knowing exactly how to evolve becomes much easier when you have real usage data.
Create a Simple Purchasing Process
User autonomy is the cornerstone of PLG. Having to go through a sales process with emails, calls, and meetings just to see the product in action is outdated and frustrating.
But let’s be clear: that doesn’t mean you should completely ignore the Marketing Funnel or Customer Journey. What you need is a streamlined process that enables autonomy whenever possible.
Marketing automation and chatbots can help in more complex scenarios—when users don’t convert right on the website.
In fact, a good chatbot can guide users through your site, share educational content, and qualify leads—all with personalized, human-free experiences. The user is in control.
This simplicity benefits both the user and your company. They gain independence. You lower costs.
Examples of Companies Using PLG
So far so good? I hope the theory’s been clear—but let’s make it even more real. Sometimes it’s hard to grasp how Product-Led Growth plays out without actual examples.
Here’s a quick look at some well-known companies using PLG. After that, we’ll show you how we used PLG here at Leadster—and how it led to 240% growth.
Let’s break it down:
OpenAI
You’ve probably used ChatGPT. And if not, you at least know what it is.
But did you ever go through one of their digital marketing funnels? Probably not. The buzz was created by users themselves—fascinated by the product.
The hype grew so much that mainstream media had no choice but to cover it. That wasn’t a marketing push. It was the natural reaction to a viral product.
One of PLG’s core goals is just that: go viral to be discovered—using the product itself.
Atlassian
Anyone working with PLG knows Atlassian. Even if you don’t recognize the company name, you probably know one of their products.
Their most popular product is Jira, a project management tool widely used in software development.
Jira represents a concept we’ll see again and again in successful PLG cases: the “how did we live without this?” effect.
Some products fit so perfectly into their market that it’s hard to imagine life before them. For many, Jira is exactly that.
If you’re still unsure, the next example will make it even clearer.
iFood
It’s very likely that, in a few years, teenagers won’t even be able to imagine a world where people ordered food without iFood.
Just like millennials can’t grasp how deliveries worked before phones and the internet. How did logistics even function?
iFood has become the default way to order food. And it did so in a highly competitive landscape—back in 2013, iFood already had several competitors, many of which it quickly absorbed.
Between 2013 and 2018, there was a true explosion of delivery apps. You’ll still find some alternatives today. But iFood remained at the top thanks to its relentless product development and ease of use.
“But iFood runs ads!” — and that’s fine. Let’s touch on that in the next example:
QuintoAndar
QuintoAndar had a few bumps along the way and still hasn’t reached the same scale as the other examples—focusing primarily on metro areas.
But still, it quickly became synonymous with hassle-free renting—a big win in terms of Product-Led Growth.
Anyone who’s ever tried renting a place through a traditional real estate agency in Brazil understands the pain. Renting is often a traumatic experience filled with bureaucracy and awkward family negotiations to find a guarantor 😅
QuintoAndar came in with a promise to simplify the process—and they’ve largely delivered. And like iFood, they also invest in advertising. Can you run ads and still be PLG?
Absolutely. Advertising is a form of marketing, but in PLG its focus is on awareness and activation. Right after seeing an ad, users can dive in and start using the product—no friction.
And just to be clear: even in a PLG model, marketing still matters. It’s just not as front-and-center as in MLG companies.
Which brings us to our own story:
Leadster
We learned a lot by applying a PLG strategy. So much so that, in just one year, we grew our customer base by over 200%.
I hope this article hasn’t given the wrong impression—that PLG means no marketing, no lead generation, and that the product does everything.
That’s not quite it. In truly revolutionary cases, like the examples above, this can happen. iFood doesn’t need to generate leads organically, for instance. QuintoAndar’s blog is practically a ghost town.
But niche SaaS companies, especially in their early stages, need marketing—inbound and outbound alike.
And that’s where we’ll start the more practical part of this article. Let’s walk through how Leadster applied PLG to carve out our space in the market.
What is Leadster’s Business Model?
Leadster is a Conversational Marketing platform designed to increase the number of qualified leads generated from websites.
Our business model is a hybrid between Product-Led Growth and Inside Sales. Users navigate to platform activation on their own, and after successfully completing the free trial, our sales team reaches out to close the deal.
This strategy led us to 243% growth in one year, all without raising capital.
What we Learned in 1 year of Applying Product-Led Growth (PLG)
Before we dive in…
These were our takeaways based on our product and user profile.
That doesn’t mean they’re universal truths for every business or strategy—but these actions worked extremely well in our case.
Here are our key learnings about marketing and product while building and executing a PLG strategy:
1. Conversion Without Engagement is Useless
In a PLG model, it’s not enough to generate leads that check all the boxes for persona and Ideal Customer Profile (ICP) if they aren’t engaged.
This lead needs to be motivated enough to understand the solution, explore the platform, follow the tutorials, and activate it on their own. In this model, the sales team doesn’t hand-hold every potential client.
What does that change?
When analyzing campaign performance, you can’t just look at visitor-to-lead conversion rates or ICP fit.
Even more important is identifying the channels that bring the highest activation and sales rates.
We also learned it’s crucial to load your site and landing pages with the most relevant content visitors need to know before converting.
That way, when they convert, they’re already more informed and more likely to activate inside the product.
2. In the Beginning, Test Multiple Paid Media Channels
Relying on a single acquisition channel in PLG proved to be a major risk for us.
Especially in the early days, when we had low traffic volumes. Paid media channels fluctuated a lot.
One month, LinkedIn Ads would bring in 8 sales. The next? Just 1.
Since we offer a free trial that stretches the sales cycle, this instability became even more complex.
So, one of our first lessons with paid media was: test several channels simultaneously.
Yes, it’s a bit risky.
But we didn’t have enough data yet to know which channels would perform best.
After running campaigns on multiple channels for a few months, we were finally able to compare the results:
- For leads who converted, we compared Customer Acquisition Cost (CAC) by channel.
- For leads who didn’t convert, we analyzed lead quality and activation rate.
That gave us real-world insights and a solid sense of what was working.
From there, we identified the best-performing channel and doubled down—optimizing campaigns and exploring every opportunity.
This experience also helped us test different copy variations, creatives, and landing pages, which led to much stronger communication with our audience.
3. Organic Channels Bring the Best Leads
Leads from organic channels have the highest conversion, activation, and sales rates.
In a PLG strategy, we learned it’s essential to maximize these channels—especially Referrals and Word of Mouth.
A user referred by a friend is already far along in the buying journey.
Concerns about security, value, and platform benefits? Pretty much handled.
And since PLG usually involves offering a free trial or freemium version, referrals happen naturally—if:
- Your product kicks ass
- It delivers what it promises
- It’s easy to use
Still, even if referrals happen organically, we saw the need to amplify that effect through structured strategies.
So we built out referral systems, agency partnerships, content initiatives, and more.
If something good is already happening without effort, you’re leaving money on the table by not investing in it.
4. UX investment is Key to Boosting Activation
What’s the point of building hundreds of amazing features if no one uses them?
Since not all users go through a guided onboarding with a sales team, we had to invest heavily in usability, ensuring people could navigate the product, understand it, and use all the features we built.
Without that investment, our product’s perceived value would have been low—and users wouldn’t be impressed.
You might think a product tour video or step-by-step guide solves this. But at Leadster, that didn’t work well at all.
We found that our users prefer discovering the platform on their own.
And since attention spans are shrinking, most users don’t want to stop and watch a video or read through every instruction.
So here’s the lesson: analyze user behavior carefully.
Don’t force users to act a certain way—it only adds friction and hurts the experience.
5. Onboarding is King
Without solid onboarding, users won’t succeed with the product. And no success = no PLG conversions.
Optimizing our onboarding process was one of the biggest growth drivers at Leadster.
At first, we lost 50% of new users right away—they didn’t even create their site chatbot.
After digging into Hotjar and studying onboarding frameworks, we completely revamped the experience.
The results speak for themselves.
That’s one of the coolest things about PLG.
Through well-designed screens, we were able to drive sales directly—because users got value from the product on their own.
Onboarding optimization could fill an entire article, but here’s our core approach:
- Don’t obsess over what you want users to do. First, identify the most important action users must complete after logging in.
- Deliver value fast—or they’ll leave with a bad impression of your company and product.
If you want to go deeper, here’s a great read (in English): User Onboarding: The Ultimate Guide (15,000+ Words).
6. Test, Test, and Test Again
One of the most important things we learned in this process was to test absolutely everything: our website, media channels, campaigns, product, onboarding, implementation…
Growth Hacking theory and CRO (Conversion Rate Optimization) gave us the foundation to run better experiments and understand our users’ behavior, needs, and expectations.
If I had to name the single biggest reason why our PLG strategy worked so well, it would be this: we ran a ton of tests.
We got very little right on the first try. Our product, our processes, and our strategy evolved a lot over the past year.
And it was this mindset—always seeking ways to optimize—that got us here.
7. Consider a Global Strategy
Being PLG means you can sell your product automatically, without human contact—so why limit yourself to just one country?
Take Pipefy, for example. It’s a startup from Curitiba that went global using PLG.
Alessio Alionço, the founder, created Pipefy to tackle the chaos of process management inside companies.
Business bureaucracy had always been messy. Finding a process that worked was harder than finding one that didn’t.
But today’s fast-paced economy demands at least decent organization—ideally flawless. Alessio interviewed 40 local businesses to shape his product. Step by step, it became a global phenomenon.
Pipefy specializes in building low-code systems to automate and streamline business workflows. It was modeled after Salesforce, but it’s easier to learn and use.
Today, Pipefy operates in 140+ countries and serves over 15,000 customers. All thanks to a strategy that never focused solely on Brazil, but aimed globally from day one—with English content, international events, etc.
Your PLG company can do the same. There are no geographic barriers. You’re not shipping hardware. Just cloud-based software. And let’s be honest: Brazil needs more global tech exports.
Who knows—maybe your startup is next. 😉
8. Build a Sales Operation for Enterprise Clients
PLG is amazing for acquiring small and medium-sized businesses. But if your product is complex and you’re targeting large accounts, you’ll likely need a sales operation after validating your strategy.
Why? Because Enterprise plans allow you to go after bigger clients with much higher deal sizes. That unlocks massive opportunities for startup growth.
OpenView Partners, the venture capital firm that coined the term “Product-Led Growth,” explains this in a great article on why you should offer enterprise plans.
According to OpenView, combining PLG with Enterprise Sales is important for three reasons:
- Sales-led becomes essential in post-sales: As you grow, sales-led tactics help keep clients engaged, raise average deal size, and drive Customer Success initiatives;
- You’re not just a tactical tool: A risk in PLG is that your product gets pigeonholed as a simple utility. Sales-led teams uncover broader operational needs within enterprise clients—and help solve them;
- Someone else will do it if you don’t: If you don’t offer tailored, sales-assisted onboarding or enterprise-style support, other companies will. You could lose potential customers—or even existing ones.
PLG doesn’t mean you need millions of low-touch users and zero human interaction. Reality check: most revenue comes from high-ticket clients, who expect some level of sales involvement.
9. Expand your Base with PQLs and PQAs
PQLs (Product Qualified Leads) are leads who’ve interacted with your product via a free trial or guided demo.
PQAs (Product Qualified Accounts) are organizations or users who have engaged with your product beyond just trying it.
These are often freemium users or basic self-service customers.
Here’s the kicker: according to OpenView’s 2023 Product Benchmarks Report, the largest revenue source for PLG companies is expanding from existing users—not acquiring new ones.
Check the graph below, then let’s wrap up:
That same report also shows two major insights:
- Social Ads are often counterproductive for PLG growth.
- Focusing on your current user base is more effective.
Discounts, free months, feature unlocks—these are all PLG tactics to increase account value.
That’s what we’ve learned so far with Product-Led Growth!
I hope this brought value—whether you’re applying PLG already or just getting curious about it.
Every month, we implement new ideas and learn more. There’s still a long way to go, and more insights will definitely come.
One final thought:
Product-Led Growth looks beautiful in theory. But applying it in Brazil? A bit more complex.
Be careful trying to copy what worked perfectly in the U.S. A product or PLG strategy that crushed it abroad doesn’t automatically work here.
Consider that your user has to:
- Understand your product;
- Create an account;
- Set everything up;
- Activate the tool;
- Get real value from it;
- And do all that without help.
That’s a major behavioral shift from how SaaS worked in Brazil until recently.
I believe we’re heading in the right direction, and soon it’ll be easier to apply PLG principles in Brazilian companies.
But here at Leadster, we still rely on human contact in parts of the process to hit high conversion rates.
That close relationship with our users—via our sales team—was key to optimizing every stage, from acquisition to closing.
So stay close to your users. Don’t leave everything up to a product screen. 🙂
That’s all I had to share. If you have any questions, drop them in the comments—I’ll reply!
