Product-led growth (PLG)

What is product-led growth (PLG)?

Product-led growth (PLG) is a strategy where the product itself drives acquisition, often through free trials or free tiers. Users try it and buy with little help from a seller. The term was coined in 2016 at the venture firm OpenView, where partner Blake Bartlett defined it as a strategy that relies on the product as the primary driver of customer acquisition, conversion and expansion.

Why it matters to a revenue leader

PLG changes the sales team's job: sellers spend less time creating interest and more time converting and expanding accounts that already use the product. Andreessen Horowitz partners describe software companies that grew bottom-up through product adoption, then added top-down sales once enterprise-wide adoption needed approval from executives or procurement. For a revenue leader at a venture-backed software company, the central question is which usage signals should trigger a sales conversation. In commercial services, PLG ideas show up in smaller forms, such as online quoting or self-booked first visits.

A software company offers a free tier and gets 5,000 signups a month. About 3% convert to paid plans on their own. Its small sales team focuses on companies where many employees are already active on the free tier, and those accounts produce most of the year's expansion revenue.