Why self-serve PLG might kill your startup

Hey — hope you’ve had a good week.

Today, I wanted to discuss product-led growth (PLG) which is popular but seems to be misunderstood. And after working with 50+ startups over the last year or so, I’ve come to realise it’s also a silent growth killer.

What is self-serve PLG?

Before we get into it, it’s important that I define a few concepts that will be discussed in this post because I think this is where the misunderstanding stems from.

PLG is a business strategy that the whole company aligns with. It puts the product at the centre of growth for acquisition, activation, retention, referral, and revenue (AARRR).

In all honesty, it’s complex and few companies can do it very well.

PLG does not necessarily equate to self-serve. The concept of “self-serve” fits into the main go-to-market (GTM) motion buckets: no touch, low touch, medium touch, and high touch. These can be simplified and are often referred to as self-serve, hybrid (e.g. self-serve, sales-assisted), and sales-led.

(Writing this, I can see how complicated this sounds)

This brings me to the main topic of this post: I don’t think PLG is inherently bad. It’s just that most startups I work with prematurely launch a self-serve motion, which is bad and causes growth issues. I’ll explain these issues and my view on a better approach to take instead.

A case for not running a self-serve motion

The key to PLG is learning from user interactions within the product — who’s getting value, what features drive engagement, and which accounts show signs they’re ready for an upsell or expansion.

The misunderstanding comes when startups conflate PLG with slapping a free trial CTA on the website and hoping magic happens.

Early-stage startups need a closed feedback loop to survive

My biggest concern with a self-serve motion is the lack of touch with early customers. Without direct communication and a hands-on approach, it’s tough to identify why people don’t activate or keep using your product (retention), which are both leading indicators for revenue and strong indicators of product-market fit.

I’ve often spoken with startup founders who run a self-serve motion, are struggling to grow and have little to no idea why. This is deadly.

Your product probably isn’t ready yet

A self-serve motion relies on your product to do much of the heavy lifting. Naturally, as an early-stage startup, your product is probably rough around the edges which is expected. Combine this with the high likelihood that you’re still figuring out those activation moments, I wouldn’t say these are prime conditions for self-serve.

PLG is more than a free trial

As discussed already, PLG doesn’t equate to self-serve. Instead, it’s a complex business strategy. Although, from experience, most startups slap a free trial CTA on the website, maybe put together a few automated email sequences and call it a day. This rarely performs well.

A proposed, more effective path

Begin with sales-led

I suggest starting with a sales-led approach. I can already hear the screams: “But I don’t charge enough for that,” “I don’t want to jump on calls,” “That makes it difficult for the customer, they hate sales.”

I’ll respond in short:

• If you’re uncomfortable or opposed to doing sales, you do so at your peril

• Don’t compare your startup to other startups at a later stage of growth

Expanding on point (2), I, too, used to think: why make people book a call when it’s so much easier to start a trial? That’s what (mostly) everyone else does. The issue is that you’re comparing yourself (a pre-PMF, early-stage startup) with companies that are likely post-PMF and searching for repeatable growth. Two entirely different beasts.

Solving PMF is a battle for survival. You should be fighting tooth and nail for every customer and to prove impact, not worrying about your ARPU or being on sales calls (what a good problem to have). A separate, possibly contributing, issue here is that startups prematurely assume they have PMF. A new post on that? Let me know.

Transition to sales-assisted

Once you understand how your product solves problems and are confident that its impact has been proven (measured empirically), it’s recommended that you ease into a sales-assisted motion. This could include an onboarding call followed by self-serve usage, a self-serve sign-up with regular human touchpoints, or however you want to skin the cat. The core idea here is that you’ve got data to support that your product works as intended and fulfils its promise, and you’ve been able to build the product to support the customer.

“True” PLG

After your product has strong retention and you’re confident that customers can realise the impact on their own, you can lean into a heavier PLG motion. Honestly, most startups I speak and work with are a little while away from this, so I will save a deep dive on this for another day.

Final thoughts

If you’re still in the early stages, I believe it’s best to focus most of your energy on working closely with customers to find your wedge and prove impact. I’m of the opinion that self-serve doesn’t help you do this.

Any questions or if you want to jam on this, let me know!

Liam

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If you’re an early-stage B2B startup

I’ve worked with 50+ B2B startups, helping them find traction and solve product-market fit. If you’d like to discuss what that looks like, please go here.

• Helped Instantly grow to $20M ARR in 3 years

• Helped SEOSpace increase revenue by (now) 10x

• Helped Flozy add $1M in 6 months

• Helped ListMint launch and grow to $100,000s in ARR