Introduction

Everyone loves to throw “Product-Led Growth” around like it’s the magic sauce. In reality, PLG is not a growth hack, it’s just common sense in SaaS right now. Buyers don’t want another sales call, they want to try the product. Paid ads are more expensive than ever. And if you’re competing with 15 AI clones of your product, you better make it dead simple for people to sign up, get value, and stay.

This post breaks down what PLG actually means, why it matters in 2025, the core metrics you need to track, and some real examples from companies that nailed it.

What is Product-Led Growth?

Product-Led Growth (PLG) is when your product does the heavy lifting for growth. Instead of relying on sales reps or shouting on LinkedIn, you design your product so that users can onboard themselves, hit the “aha moment” quickly, and naturally convert into paying customers.

Think of it like this:

• Sales-led growth = someone has to call you to explain why it’s good.
• Marketing-led growth = someone has to convince you with ads and ebooks.
• Product-led growth = you just use it and go, “ah, this is good, I’ll pay.”

Your product becomes the funnel.

Why PLG Matters in 2025

Here’s the reality check:

1. Acquisition costs are up. Ads, influencers, outbound, you name it. Everything costs more.
2. Users expect instant value. Nobody wants a “book a demo” wall before they even know what you do.
3. AI competition is wild. New GPT-powered tools pop up every week. The easiest way to stand out is to make adoption frictionless.

PLG is not a trend, it’s survival.

The Principles of PLG

Every PLG company has these things in common:

• Self-serve onboarding. Users can sign up and see value without handholding.
• Value before payment. A free tier or trial that shows what’s possible.
• Loops, not funnels. Sharing, inviting, collaborating. Growth built into the product.
• Data-driven. You can’t improve what you don’t track.

That last one is where most founders stumble. You can’t run PLG blind.

The Metrics That Actually Matter

If you want to sound smart about PLG, you’ll hear terms like “activation” and “expansion.” Here’s what they actually mean in practice:

• Acquisition: How many new users sign up.
• Activation: How many hit the “aha moment.”
• Retention: How many come back (churn is the enemy).
• Monetization: How much you make per user (ARPU, LTV).
• Virality: How many invite others or share outputs.

If you’re not measuring these, you’re just guessing. That’s why tools like Roaarrr exist. So you can see exactly where people drop off and fix it before you waste more ad spend.

The PLG Funnel (Explained Like You’re Five)

The journey looks like this:

Awareness → Signup → Activation → Conversion → Retention → Expansion.

It’s not rocket science, but most companies mess it up because they only look at signups and revenue. The magic is in the middle: activation and retention. Nail those and your funnel feeds itself.

Real Examples

• Slack: You invite your team, suddenly the whole company is in.
• Notion: Free until you realize your entire life is inside it, then you upgrade.
• Figma: Collaboration is the growth engine. You can’t use it alone for long.

Now look at AI startups. Almost all of them run some form of PLG. Free tokens, free usage, free trial. The model works because devs want to test before they commit.

The Gotchas

PLG is great, but it’s not all rainbows. Common mistakes:

• Giving away too much for free.
• Thinking PLG = no sales team. (Sometimes you need both.)
• Having no idea what your “aha moment” is.
• Not tracking the funnel.

The last one is fatal. If you can’t see the funnel, you can’t fix it.

How to Start PLG (Without Overthinking It)

1. Figure out your “aha moment.” What’s the action that makes a user go, “this is good”?
2. Make onboarding get them there as fast as possible.
3. Track everything. Funnel leaks are normal, but you need to see them.
4. Iterate fast.

PLG is not about perfection. It’s about making your product addictive enough that users want more.

Quick FAQ

Is PLG right for every SaaS?

No. If your product needs six months of integration, PLG is tough. Hybrid models work better there.

What’s the difference between PLG and sales-led?

PLG = self-serve. Sales-led = human-first. Many companies use both.

What’s the best tool for tracking PLG?

Roaarrr if you want something founder-friendly. PostHog, Mixpanel, and Amplitude if you like complexity.

Conclusion

PLG is not just another growth model. It’s the one that actually fits how people buy software in 2025.

Start small. Get users to value quickly, measure what matters, and fix your funnel. The rest follows.

👉 If you want to see your PLG funnel without feeling like you’re implementing an enterprise BI tool, try Roaarrr.