Product-Led Growth (PLG) is a business growth strategy that places the product at the center of everything. Instead of relying primarily on traditional marketing and sales tactics to attract and retain customers, growth is driven by the direct experience users have with the product itself. This makes it essential to put the product in front of potential customers quickly and accessibly—where “accessibility” means a low-cost (or freemium) model and an almost nonexistent learning curve. It’s often said that PLG is a mix of marketing, data, and user behavior analysis.
How Product-Led Growth Works
In a PLG model, the product is designed to deliver value from the very first interaction, allowing users to quickly perceive its benefits. The product itself drives interest, adoption, and retention, leading to three key concepts, which follow a sequential logic:
- Free trials or freemium models: Removing barriers to entry makes acquisition easier.
- User experience: An intuitive, frictionless product ensures that users have no incentive to abandon it for a competitor.
- Virality and word-of-mouth: Satisfied users naturally share their experiences, generating organic growth.
A classic example of a PLG-driven company is Slack, which grew through its intuitive user experience and team-based virality. Other examples include Zoom and Dropbox, both leveraging freemium models to attract users and later convert them into paying customers. However, one of the most iconic PLG examples is Spotify—starting with a free ad-supported model that attracted millions of users, leading to a seamless transition to premium subscriptions. The result? In 2024, Spotify became profitable for the first time, posting a €1.138 billion net income.
When Does Product-Led Growth Not Work?
PLG isn’t a one-size-fits-all approach. Some businesses struggle to implement it due to both launch barriers (initial adoption challenges) and traction issues (sustaining growth).
1. Lack of a clear, compelling product
If a product doesn’t address an urgent or specific market need, organic adoption is unlikely. A “me too” product rarely gains traction—either you’re different, or you’re cheap.
2. Misaligned target market
PLG works best in industries where users can freely test products themselves, like SaaS. In traditional sectors requiring highly customized sales processes (e.g., industrial machinery), the impact is limited.
3. Poor user experience
The golden rule of PLG is ease of use. If a product has a steep learning curve or lacks an intuitive experience, users will disengage before realizing its value.
4. Lack of virality
PLG thrives on organic growth. The product needs to captivate us. If a product doesn’t naturally encourage sharing, referrals, or collaboration, its reach and adoption will be constrained.
5. Inappropriate pricing or freemium model
Here, we’re dealing with a “kick-off” problem rather than “traction”. Many PLG strategies rely on offering a free or low-cost version to attract users. If we’re also operating under a subscription model (and we firmly trust the product’s strength), setting high entry prices wouldn’t make much sense given the massive opportunity in terms of customer recurrence and Lifetime Value.
6. Failure to track key metrics
What we’d call an “unforced error” in tennis. Companies implementing PLG must constantly measure metrics like activation, retention, and expansion. If these indicators aren’t monitored or optimized, the idea of adopting a PLG model should be off the table.
In short, Product-Led Growth isn’t a universal solution, and to succeed, the product must be highly attractive and intuitive. Without that, viral growth becomes nearly impossible.
Is Product-Led Growth Viable Beyond SaaS?
We could say that Product-Led Growth (PLG) is especially well-suited for SaaS products, though not necessarily limited exclusively to them. It’s clear that SaaS products possess characteristics that favor the adoption of the PLG model, such as their digital nature, the ease of implementing free versions (freemium or trials), and the ability to collect user interaction data to optimize the real-time experience. This also helps identify new requirements and opportunities, leading to the creation of additional features that can be integrated into the digital product and its value proposition delivery cycle. The wheel must keep turning.
However, for non-SaaS products, implementing PLG can face more barriers. These challenges (though not exclusive) can be classified into two main categories: “kick-off” issues and “viralization” issues (which impact traction). For instance:
- Physical products or traditional services come with manufacturing, distribution, and logistics costs that make it difficult to offer free trials or freemium models. Clearly, this is an issue right at the kick-off stage.
- The customer experience is not always fully self-sufficient. In sectors like consumer goods or retail, human intervention (such as a salesperson) often remains crucial at various stages.
- Physical products don’t allow for sharing experiences in the same way SaaS products do. Here, traction—or the lack thereof—becomes a clear problem.
That said, some non-SaaS products have successfully adopted PLG elements. For example, in the education sector, companies offering electronic devices have combined hardware with software, allowing initial access to be free while charging for advanced features.
Yes, Product-Led Growth has been primarily developed in the SaaS domain, but at its core, it’s about enabling the product to “sell itself” without direct commercial intervention. This makes it more challenging to apply to physical products or traditional services, but not impossible.
That said, some non-SaaS brands have successfully adopted PLG principles.
1. Tesla (Automotive)
Beyond the intense controversy surrounding its founder, Tesla is undoubtedly an example of the Product-Led Growth model in action, where it was the product itself (and not Marketing or Sales) that drove its initial momentum and traction:
- Seamless buying experience – Eliminating the dealership model, Tesla pioneered direct online sales.
- Viral growth – Word-of-mouth and test drives fueled interest.
- Product expansion – Software updates unlocked new features, driving long-term value.
2. Peloton (Fitness & Hardware)
Peloton can be summarized as a U.S.-based company that combines hardware, software, and content to deliver a connected fitness experience.
- User experience: Its flagship products are bikes and treadmills equipped with interactive screens, allowing users to access live and on-demand classes.
- Organic adoption: While it can be used individually, the product is “consumed” collectively, fostering a sense of community that drives engagement and recommendation through gamification and social interaction.
- Expansion through usage: The business model starts with the sale of essential equipment but gains traction through recurring subscription revenues.
3. Nespresso (Consumer Goods & Appliances)
There’s little left to say about Nespresso that hasn’t already been said. A Product-Led Growth case study before the term even existed.
- Adoption through trial: The model of coffee machines with exclusive capsules allowed users to try the product with minimal friction (thanks to an accessible entry price).
- Expansion through usage: Once someone owned the machine, capsule repurchases became recurrent.
- Community effect and loyalty: Achieved through the initial exclusivity of capsules and user memberships. That said, the exclusive use of Nespresso-branded capsules in their coffee machines ceased to be mandatory around 2012, when the patents protecting their capsule design expired.
4. Gillette (Consumer Goods – Razor & Blade Model)
An iconic shaving brand, well-known for its “Razor & Blade” business model, where razors are sold at a low price—or even given away—while replacement blades generate recurring revenue. This concept became a standard in consumer goods, also applied to industries like printers (cheap printer, expensive cartridges) or capsule coffee machines.
- Product as an acquisition driver: Razors were given away or sold very cheaply.
- Expansion through usage: Recurring revenue was generated through blade replacements.
- Word of mouth and natural adoption: The user experience kept consumers loyal to the brand.
… Though the model leaned more towards captivity than loyalty. Once someone purchased a Gillette razor, they were “locked” into its ecosystem, as the replacements were brand-specific and incompatible with others. Switching systems required a new upfront investment, creating friction in the decision. The Product-Led Growth approach was later evident in constant product innovations: more blades, smoother glide, less irritation, and so on.
Final Thoughts
Although Product-Led Growth is easier to apply in software, some “non-digital” models have managed to design strategies where the product itself drives adoption and expansion, without the need for sales teams. This demonstrates that there is indeed life for PLG beyond SaaS, though it can certainly be challenging. This is possible only if we understand that Product-Led Growth is a business model that inherently demands significant cross-functionality.
And here lies part of the problem: Product-Led Growth effectively means the deconstruction—or at the very least, the redefinition—of the role of the “Product Manager,” who ceases to be the sole owner. In this model, the product becomes “democratized”, allowing areas like Marketing, Sales, or IT to take an active role in strategic decision-making. If we are neither organizationally nor culturally prepared for this, the Product-Led Growth model will struggle to gain traction.
