How Software Companies Can Avoid the Trap of Product-Led Growth – TwentyFirstCenturyCurrencyNews
– vernon@tfcc.com
[A recent analysis](https://tomtunguz.com/plg-less-profitable/) showed that public companies that initially pursued a PLG model are actually 5–10% less profitable compared to their sales-led counterparts — implying that many PLG companies, despite initially benefiting from superior unit economics, actually lose efficiency as they scale.The PLG Trap creates a common and natural dilemma for SaaS executives and boards, for several reasons: – In building a great product that is appealing to end-users, companies optimize their product and support organizations for small teams.The most popular motions PLG companies build include: – self-service: an e-commerce experience that generates demand and captures end-users to land in organizations – high-velocity sales: a data-driven sales motion that uses modern customer relationship management (CRM) tools, automated workflows, and analytical segmentation to identify and convert organizations with higher willingness to pay, – expansion sales: a capability focusing on transitioning organizations with strong product usage to adopt the product company-wide, and – outbound sales: an outbound motion targeting senior executives at prospects that may not have as much organic product adoption.
Link: https://twentyfirstcenturycurrency.com/how-software-companies-can-avoid-the-trap-of-product-led-growth/