The PLG Masterclass People Paid For—Get It Free

1. 0:00 – 0:55

   Intro: Slack playbook is dead

   1. AGAakash Gupta0:00

      The way we build PLG products has fundamentally changed. Product-led growth used to be simple. You add a free trial, you add a free plan, viral growth comes, you activate them and retain them. Now, everything has changed. Over the last ten years, everybody has copied the Slack and Dropbox playbook. You need a new playbook. You need to understand how to do product-led growth for 2026. In today's episode, you'll get to see my live talk to people who paid thousands of dollars to come see me break down the latest state of product-led growth. I'm going to go through all of the layers of product-led growth and give you real examples and screenshots from the top PLG products so that you can steal those patterns and implement them in your product. Before I was a VP of product at Apollo.io, I wish I had this playbook. So go out there, implement these tools, and do product-led growth like the best.

2. 0:55 – 2:43

   PLG has changed

   1. AGAakash Gupta0:55

      Hello, hello. How is everybody's day going? Can I get some enthusiasm? Awesome. Do you guys want to give it up for Lily, who's amazing? [clapping] So all of you guys have heard the hype about product-led growth. Obviously, it's a term that has really exploded in interest. But how has product-led growth changed? What has actually evolved? I feel like a lot of the content you might find out there, it feels dated. So today, we're going to talk really about that change that has happened in product-led growth. And I wanted to rewind history for you a little bit to see where-- when did product-led growth really become such a thing? How come we're seeing it in our LinkedIn feeds all the time? So product-led growth as a term, it was invented in twenty sixteen, and you really see the Google search interest popping, popping off in like two thousand seventeen and two thousand nineteen. Really hitting a peak in twenty twenty-three, and it's a global phenomena. It's not just in Europe, it's not just in America. You see product-led growth popping up in all sorts of software companies. So who am I and why am I talking about product-led growth? Well, as Lily mentioned, I spend my time studying product-led growth companies. So for instance, over the last six months, I've published about twenty deep dives on various product-led growth companies, really studying what their product does, how they grow, how they build product. And today, I want to summarize what I've learned about the evolution of product-led growth doing so many deep dives. You might have seen me online. I write a lot on LinkedIn. I have that newsletter grown to over two hundred thousand followers on LinkedIn, really focusing on this topic, talking to executives, coaching companies on how to improve their product-led growth motions. So that's where I'm coming

3. 2:43 – 6:03

   What is PLG

   1. AGAakash Gupta2:43

      from. That's how I've learned about this space. And where I want to start is: What is product-led growth? Because it's not that easy to define product-led growth. And usually, when I ask someone to define it, there's at least three or four things I'll nitpick in their definition. So what's the first nit? The first nit is assuming product-led growth is self-serve. And this is an outcome of how a lot of product-led growth companies are structured, or even sales-led growth companies, where the product-led part of it, all the revenue coming in from the self-serve motion, we call that the product-led motion. But really, if you want to do product-led growth correctly, you have to go back to what Blake Bartlett envisioned when he actually created the term. And what he thought was product-led growth is a method of organizing and building a company. It's about putting the product first to acquire customers, to convert them, to engage them, retain them, and monetize them. And we'll talk about all of those layers of product-led growth today. In product-led growth, there's two elements I want you to think about: the strategy and the tactics. A lot of those companies that I mentioned who reach out to me for help with their product-led growth motion, what's broken often tends to be the strategy. They don't have CEO-level buy-in. Their VP of sales is actively dissing the product-led growth motion. Their VP of marketing isn't developing leads that will come in through that. When that happens, your product-led growth motion is bound to fail. But if you have all the pieces in place, if you have the leadership buy-in, then you need to get to the level of tactics. And what I find is that there's a lot of content on product-led growth that just stuck at this strategy layer. So today, we're actually going to go through tactics for you across each of the strategic areas in product-led growth. And I'd be remiss to say that you can have the greatest strategy, the greatest tactics. It's all for naught if you don't have the right people. And there's two categories of people you should think about. The product managers, they're a critical part of it, along with their designers and engineering counterparts. That product trio is the heart of product-led growth. You can't develop product-led growth if you don't have PMs who can drive discovery of new insights. If you just have PMs who are project managers and order takers, your product-led growth motion is bound to fail because product-led growth is based on this idea of rapid experimentation, of learning. You can't predetermine what you're going to want to build for your product-led growth motion one year in advance. You're going to learn that. You're going to iterate on something you learn one month to ship what you learn the next month. What's also important then is having company-level buy-in. Your marketing team might not necessarily get all of the features enumerated exactly as they're going to be shipped next month or next quarter. Your sales team might have to deal with new features being-- coming out of experimentation and rapidly learning what those are in order to sell them. And so the people really do matter in success. But today, we're really going to focus on the strategy and tacticsSo

4. 6:03 – 8:38

   The 7-layer framework

   1. AGAakash Gupta6:03

      let's introduce our framework for breaking down product-led strategy. It's funny, having worked in product-led growth companies probably for the first seven or eight years, I lacked a coherent understanding, a coherent framework to organize what are all the elements of our business and our product that are creating this PLG motion. So that's where I turn to my friend, Jared Herman, who's a director of product at Backstage. He, like me, does these really deep company deep dives, five to ten thousand words, spends multiple weeks researching them. And as we both collaborated on various pieces of content, like deep diving on Miro, deep diving on Canva, what we learned is that there's really seven layers you can think about when it comes to product-led growth. And these are the seven layers I want you to organize your product-led growth strategy around. The first, go to market. So it's not just about product, but it's about how you acquire customers with your product. The second, the information for decision you're providing people. The third, how you convert those free users, those free users, whether they're free trial or freemium, to paying users, and then activate them, how you get them to actually achieve value from your product. And then once they achieve value, how do you retain them? How do you monetize them, and how do you expand into those accounts once you have them? These are the seven elements that you have to nail in order to nail a product-led growth strategy. What people often ask me once they see this verticalized framework is, "Okay, so do I need to go through this sequentially? Do I need to nail layer one and then do layer two and then do layer three?" And that's a good question, and the answer is sort of. So you sort of need to focus on the layer going top-down where you're most broken. So let's say my go-to-market is broken. We're not generating any PLG inbound leads. Well, it doesn't really matter then if you're doing a bunch of experimentation as a product leader on monetization six layers later. In general, the rule of thumb to think about is where are we broken? We wanna focus on that layer the most and maybe one or two layers below it. We don't wanna go too deep into the funnel because users won't actually be getting there. You won't have the volume to do the experimentation or the testing to actually create results and drive insights.

5. 8:38 – 15:20

   Layer 1: Go to market

   1. AGAakash Gupta8:38

      So let's start with that first motion of go to market. This is how you acquire customers, and I think there's a lot of misconceptions out there about what a product-led company is doing to acquire customers. So I want you to think about this mental model of two product surface areas. And going back, the reason I'm introducing these surface areas is because when I was a product leader, even leading product growth teams five, seven years ago, I don't think there was a clear definition of what surface areas you should focus on. So the two I want you to focus on are your marketing, which really does matter, which is why you see so many product growth leaders like myself spending so much time with the marketing team and your website, which again, is often owned by the marketing team, but is super important for driving actual success with your PLG motion. So let me tell you why. And let's do a history lesson because we're talking about the evolution of PLG, so I want you all to really get in the mind state of what PLG was in 2018 when it was really popping off, right? So who is the company that most people think about even to this day for product-led growth? It's Slack. In four years, they grew from zero to eight million daily active users. That's daily, not monthly. So it was a truly a phenomenal feat, and everybody studied their model. And what I'm gonna show you about Slack isn't wrong. It's best of class as of twenty eighteen. A company like Canva, where-- what are they reaching? They're reaching numbers like a hundred and seventy million monthly active users. So unlike Slack, which's growth has slowed quite a bit, Canva continues to see even steepening growth over the last couple years. Some stats that were released about Canva show that they have two billion-plus in annual recurring revenue. So if it were public, it would be one of the biggest SaaS companies in the world, although it is private, and it's growing at a stunning fifty percent per year. So what are they doing? How have they evolved Slack's playbook? So let's look at Slack's marketing. So this was a huge campaign that you might have seen in twenty eighteen. They did banner advertising. They did buses. They did billboards. And what was the enemy? It was email. Slack helps you get less email. So they're fighting the incumbent. They're talking about our alternative workplace chat. It's pretty great. I loved this ad campaign. It worked on me. But what does Canva do? Canva doesn't necessarily spend on those traditional marketing channels. You rarely see them spending on TV ads or anything like that. What are they spending on? They're spending on optimizing their product-led SEO. So it's a product-led marketing channel where they are creating top ranking pages for Google search terms that have enormous volume. So many people are searching for things like build an Instagram post. And what do they see when they land on Canva? They see one click to a free tool to build an Instagram post. No login, no credit card required. So they're acquiring millions and millions of people every month just who are searching. They maybe haven't even heard of Canva. They could be in a place of the world or a sector of the economy that doesn't use Canva much, but they find it, and they're able to create that Instagram post.Now let's look to the website. I said marketing is one surface, website is the other surface. So Slack's website in 2018 was crazy simple. Like, it still blows my mind to see this, that I could put it up in just one frame for you guys. But I want you to double-click on this. It's actually a genius page. I'm not criticizing this page. They have where work happens, which is a pretty good positioning statement. It helps you understand what it is in terms of a first order effect, not like a fi- fifth order effect. And then they have this really cool CTA, drop in your email. If you guys remember, when you drop in your email on Slack, you don't even have to set up a password. They just send you a magic link, and all of the sudden, one click later, you're into a Slack workspace. So this is really good PLG, like you're getting people into your product. They, they show off their cool logos. At the time, you know, Airbnb, that was like who everybody wanted to be. And then they emphasize try it for free, which of course is a theme of product-led growth products. What does Canva look like? Much longer. You can read this from left to right, and I wanna break this down for you because there's a lot of elements in here that you should be implementing in your homepages. Obviously, they have that great positioning, what will you design today? But then they immediately get into these personalized journeys. And I'm gonna continue to repeat myself on these personalized journeys because personalization has been a bit of a buzzword, but I'm hoping today you'll get to see how it's actually implemented in action. So they're helping you understand, for instance, what type of user are you? Are you a workplace? Are you an educator? Are you a creator? They're helping you understand what type of plan you might choose from Canva as a result, whether it's free or pro, teams or enterprise. Then they're showing you their client logos, as you might expect, show off their product. They have one, two, three, four slots to show off their product, and then they have their template gallery, which is another thing that you see a lot of PLG companies using now. They talk about their AI, and then they have their CTA. So it's a much longer homepage, and it's putting the product first while personalizing for users. So if we summarize this layer one on go-to-market motions, what was Slack doing and what is Canva doing? Slack was using traditional marketing channels. Canva is using a lot of product-led marketing channels. Slack was positioning itself against an incumbent. What is Canva's incumbent? What's-- It's Adobe. They're stealing this two billion in ARR from Adobe products, but Adobe was nowhere on their website. It wasn't mentioned. The focus was on their product and on you as a user. What are your needs and how can Canva solve those? So it's really this idea of dynamic personalized landing pages. Are you a Canva Pro user or a Canva Enterprise user? Putting that at the forefront so that both B2C use cases and B2B users and buyers can immediately get to where they want to go. So that's the big evolution. Of course, there were some similarities as well. We saw they both tried to direct you immediately into their product. They both emphasize free, and those are timeless principles when you're going to market for PLG.

6. 15:20 – 21:05

   Layer 2: Information for decision

   1. AGAakash Gupta15:20

      So that was go-to-market. Once you get somebody to your website, the next really important thing for you as a product-led growth company is to provide them with the information for decision to really make sure that they do try that product that you're trying to push them in towards. And so again, I wanna provide you with a mental model takeaway for what you should think about affecting if you're a leader in one of these spaces. The first is your pricing page. When you look at your website analytics, the second most visited page on your website is going to be your pricing page. I've worked with hundreds of companies, this is always the case. And the second thing to think about is your lower funnel marketing channels, so your case studies, your template galleries, and things like your referrals channel. So let's take a look at how companies did-- treated these surfaces in 2018 versus 2024. In 2018, who was the poster child outside of Slack for product-led growth? Dropbox. And in fact, my friend Thomas Tunguz, he named them the king of freemium in his blog when he was analyzing their IPO that happened that year. And they do a lot of things really, really well and ahead of their time. So let's take a look at that, but let's contrast them to Notion, who has continued to grow. Where you look at Dropbox since its IPO, stock price has been relatively flat, revenue growth has been relatively meager. If you look at in the timeframe since Dropbox IPO'd, Notion has grown from zero to thirty million users. It has grown to over half a billion in ARR, so it has actually become bigger than Dropbox in a lot of respects. How have they evolved Dropbox playbook? So we're gonna start with Dropbox's pricing page. So Dropbox did have a nice pricing page for 2018. I remember looking at it myself and stealing some elements. One of the things you re- I really like is you see those tabs for individuals and teams. So they do have some element of personalization. But on the whole, it's a pretty static pricing page. And you see that common trope you see in pricing pages, which is your feature comparison table, the check marks. How many B2B SaaS products do you see this in? If you open up their pricing pages today, probably seventy-five percent of them would still have this 2018 pattern of this table. And what's not clear from this pricing page is, as a user, which bucket do I fit in? And there's a missed opportunity for visual clarity. Let's take a look at Notion's instead. Notion's pricing page makes it super easy to figure out which plan you should go towards. Are you a team? Are you an enterprise? Are you free? Do you need the AI functionality? It's all very visually easy, above the fold, simply explained with really small boxes explaining each plan. They don't have that really long infinite scrollTable comparing what's in what plan. They have this transparency around exactly what the most important features in each plan would be so that you can immediately segment yourself. Now let's move to the marketing channels. So I mentioned these are the lower funnel marketing channels. In 2018, what was the hotness? Dropbox's referrals program. In fact, if you search referrals program to this day, you will see infinite articles talking about Dropbox's referral program as the canonical example for growth. And by 2018, when they were IPO-ing, they had actually done a huge amount of optimizations and testing on their program. So best in class at the time included things like invite with your Gmail CTA, share on Facebook. It was very basic lower funnel execution, but it was tied to their value metric, which is the amount of storage space you get. So it was very smart in that way, and they really used this broader PLG trend you were seeing with companies like Airbnb and Uber at the time of referrals. What's the new lower funnel marketing channel? You guessed it, right. Templates. So Notion has those dynamic template galleries, and templates are very powerful for your product-led growth products because it's allowing users to figure out their use case and instead of going from zero to one in ten minutes, zero to one in one minute, right? They're immediately able to see, okay, this is how I could potentially get to an end state that's gonna be successful for me. And that's the broader PLG trend in 2024 for these lower funnel marketing channels, whether it's Notion here that we've shown, or Miro or Canva that we showed earlier, or even Figma, all these companies are emphasizing their templates. So what's the evolution? What's changed from Dropbox to Notion? We've seen that huge shift from the static linear pricing page with the feature comparison table to a really clean pricing page where it's really easy to see what segment you belong to and the product team is making choices. Of course, those little boxes Notion had didn't encapsulate every difference between the enterprise and the plo- pro plan, but the product team, the copywriters, the marketers, they're making bold decisions about these are the features to emphasize. And then how are they marketing it? It's not a referral program. It's not a transactional program. That referral program, one of the big hindrances of it, what companies realized, is it was always user-focused. It wasn't account-focused. What's something that's more account-focused is getting everybody in your account, every user in your account onto a template that's gonna help them.

7. 21:05 – 27:04

   Layer 3: Free-to-paid conversion

   1. AGAakash Gupta21:05

      Now let's move to the third layer, and I think this is actually a really neglected layer in the literature. I don't see all the PLG content folks actually talking that much about free to paid conversion. So that's why I-- we actually evolved the iceberg over time, Jared and I, to add this in as a specific layer because it is one of the most important levers. If you're a product growth leader in the room today, like this is one of the levers where I guarantee you, you're gonna walk away with some experiments that you can run that are gonna generate ARR for you this month, this quarter. So what are the surfaces that you should be looking at? The two surfaces that are most important are what is the configuration of your free plan. Do you have freemium? Do you have free trial? Do you have a reverse trial? Now what's a reverse trial? That's when you get access to the premium version of the product at the beginning, and then over time you get dropped into a lower plan. And the second surface area that's really important is your feature gates, or often now known as billing gates. So this is when you reach some level of functionality in your freemium or your free trial and they pop up, "Oh, to use that, you need to pay." These two surface areas, I guarantee you, if you just run a few experiments, you'll see huge results. I was recently chatting with the team at Lempire when they released reverse trials, huge improvement to free to paid conversion. And I'll also go through the example of Attio. So Attio, m-many of you may not have heard of it yet because it's only a Series B company, but I guarantee you, you will hear about it in the next five to ten years. Uh, they just raised a thirty-three million dollar Series B, and they're taking on Salesforce. It's one of the most red ocean markets out there, right? You have HubSpot, you have Salesforce, you have Pipedrive, you have so many awesome CRMs in the market, but Attio is somehow growing incredibly fast, over a hundred percent per year. And we're gonna compare them to our good friend Dropbox because they are such a canonical example in the PLG literature. So looking back at that pricing page, now I want you to focus on two different details there. So the first detail is what is their free configuration? So they actually have that freemium model, that's your leftmost plan, and then they have free trials for their pro plan. So that's, that's pretty advanced stuff. Some of you guys listening, you may only have freemium or free trial. They have both. Um, and then they don't even require a credit card for that freemium plan, although they do require a credit card for the free trial because they wanna capture those people who forget to cancel. Attio takes a different approach. So Attio, I actually interviewed their entire leadership team, and in September 2023, they introduced a reverse trial. Actually, after reading content like mine and Elena Verna's and Kyle Poyar's that was talking about reverse trials, they implemented it. And guess what? Even already being a Series B company, they nearly doubled their free to paid conversion rate. Incredibly powerful. So you can see when you select that free plan in the left, actually the first thing they show you is, "Welcome to Attio Pro. We're actually giving you the Pro plan for free for fourteen days." No credit card required, access to Pro functionality that would normally cost youHundreds usually of dollars free. And what's the other interesting detail about Attio compared to Dropbox? They show their enterprise price. So few SaaS companies are showing their enterprise price on their pricing page. And so if you look at the data, I mentioned my friend Kyle Poyar. He does a survey of over two thousand SaaS companies every year where he gets them to share their conversion rates, and this is the data on how those models compare because I always get people asking me, "Should I do free trial? Should I do freemium? Should I do trial plus freemium?" And what I always tell them is that your conversion rates are gonna be about equal. Actually, that's what the data shows. Uh, but your free audience size is gonna be very different. If you have free trial, well, you have no free audience, right? If you have freemium, that's when you're gonna have the biggest free audience. You'll see, like, certain SaaS companies like Apollo.io where I worked where we had many millions of people in the freemium plan. In your trial plus freemium, you'll take away a little bit from the freemium group, so it's a little bit smaller of a free audience. And then in reverse trial, you'll have a slightly lower freemium group again, but that's where you have the highest paid conversion, and the data really does support this. Now, the other thing I mentioned outside of freemium first free trial is your billing gate. So what happens in the free trial or the freemium on Dropbox? They have this message, "It looks as though you're out of space. It costs you two gigabytes, so go for it. Uh, you only have two gigabytes. You need more space." What does a best-in-class company do like Canva for their billing gates? I think it's magical. So I've only shown two of their billing gates here, but they actually have, like, 16 contextual billing gates throughout their product. So what happens, for instance, if you wanna go resize your Canva image, they contextually resize it for you, but they say, "Hey, to get access to these resized images, you need to upgrade to Pro." So it's literally showing you exactly what you're gonna get in paid plan done for you, one click to pay. Another thing you might wanna do in Canva is share it out. So if you wanna share out your artifact that you've created, your Instagram design, they're gonna put a watermark on it, but you ca- have the option to pay just $7, like a one-time fee, or you can upgrade. So it's a wonderful billing gate example. So what's changed between Dropbox and Attio and Canva? Well, what we've seen is the reverse trial model and contextual billing gates have really become huge levers. If you don't have those in your product today, I highly recommend you test some of those out.

8. 27:04 – 29:57

   Layer 4: Activation

   1. AGAakash Gupta27:04

      Now let's move to the one that-- I think this is the classical growth team. So a lot of you guys who might have product growth teams, you might have encountered the activation squad. And activation exists in so many companies because it's really important. And the two surface areas that I want you to focus on is your onboarding flow and your in-product checklists and your homepage. And it's really important to iterate on these and not just leave them the same for five or six years. So in... Let's, let's do s- another history lesson, right? In 2018, I said Dropbox IPO'd. Well, what did one of its competitors, Box, do? It decided we need to make a huge shift to product-led growth. So they hired some of the best people in product-led growth, not just ICPMs, but also consultants. They took all the best practices. How did they do their onboarding? So they had step-based onboarding, so this is kind of like-- This is a pretty smart idea, actually, which is like you can only do one thing next. What's the next best thing you need to do? And then they had this aha moment through tasks. So they had these tasks that showed up in the product that you could s- you could win rewards, and they would then gamify these rewards even further, like Duolingo has done, our prior speaker, and create this amazing motivation through gamification. Now let's look at what companies like in 2024 are doing that are succeeding much more than Box. So Calendly, for instance, they're growing at forty plus percent per year, and they've managed to hit two hundred and seventy million ARR. How are they treating it? So the first thing is they always have all the PLG companies now, you'll see they immediately try to get you personalized into the onboarding that matters for you. Once they figure out what you are, are you a salesperson using Calendly? Then probably like, "We need to connect you to your CRM so that we can record this," right? But if you're just a person booking a meeting, no, we'll just get you there right away. And they then immediately drive to that aha moment. And then most importantly, with their in-product checklists in their homepage, they have this ability for you to b- have a personalized experience to activate throughout the rest of the product. And I really want you guys to focus in on your in-app homepage for activation. Make sure you have your demo video, for instance, on there. Make sure you have an ability to contact support. Make sure you have an ability to contact sales. Calendly does all of this really well while taking the best practices from Box around gamification. So what's changed? Well, it's much more flexible. It's self-paced. They've personalized, and most importantly, they've used that homepage space to continue the activation beyond onboarding. There's a lot of activation PMs I will help with, and I'll say, "Well, why is your strategy all about onboarding?" That in-app homepage is really important as well. So we've talked about activation. That's a team you guys have heard a lot about.

9. 29:57 – 33:55

   Layer 5: Retention

   1. AGAakash Gupta29:57

      Now let's talk about retention. Some of your core product teams, that's all they're focused on in the end of the day, right? Retention is one of those metrics that if you can really improve, if you look at a Snowflake, for instance, when they had a hundred fifty percent plus NRR, they were trading at thirty times next year's sales, right? It's something that Wall Street and VC investors, everybody cares a lot about. So I always struggled with, like, what are the right product surfaces to think about when it comes to retention? The first is what habit loops you're driving, and the second is what product updates and ongoing value are you providing?So let's look at another PLG giant that you guys might have forgot about, Evernote.

   2. SPSpeaker30:40

      [laughs]

   3. AGAakash Gupta30:41

      It had an office on 101, if you were in the Bay Area. You used to pass by it all the time, right? It was like a mark of PLG success. And if you study your retention a lot and you work on retention a lot, you will be amazed at that chart right there, right? This is the infamous smile chart. So every single retention chart you ever see, it's always going down, down, down, right? It, like, kind of looks crazy. You're like, "Oh my God, we're at, like, 30% retention after one year." In, uh, Evernote's case, they're at 25%. Okay. But then wait, what? At 30% we're returning to 30%? After three years we're returning to almost as high as retention as we were in the first month? They had this amazing smile chart. So they were doing a lot right, but since then things haven't gone so well. You just look at their app downloads, it's gone from 10 million a year to almost zero. So what did they do so well to create their smile chart? The first thing was cross-device syncing. If you guys remember, like, Apple Notes, it wasn't so good in 2018 and before that. So just having the ability to update your note on your tablet, your computer, and your phone was pretty revolutionary for Evernote, and that was a huge part of it. And then they had amazing note organization and tagging. So things like Building a Second Brain by Tiago Forte popped up, where Evernote could be your second brain, and people were just putting everything into their Evernote. But the limitation was that they didn't really expand into team-wide collaboration. Now, if we fast-forward to a company like Figma, they have nailed team-wide collaboration, and that's why they're able to grow at 35% per year at $700 million in ARR when they were just at $4 million in ARR [laughs] in 2018. It's been a phenomenal growth story for Figma, right? They've taken all the market share from Sketch. What do they do? Those infamous moving cursors, you guys, that real-time collaboration where they're expanding into the team use case. They're really good at integrations. Have you ever put a Figma file into Slack or into Notion? It looks beautiful, right? And it's really easy to click into the Figma file after. And then they do so many feature updates. Just recently they released Slides, right, their version of Slides. They released Dev Mode. They've released so many engaging features over time. That's how they've built that habit loop, that's how they've expanded into teams, and that's how Figma has driven even better retention than Evernote. So if you compare the two models, yes, they both did have the freemium model. Yes, they both do have good cross-device. But where Figma is really shining is by not just building retention on you the user, but on you the team, on you the company. PMs wanna come in and comment on Figma files. Researchers wanna come in. Designers and engineers obviously are spending a lot of time there. And then they're continuously adding feature rollouts, like FigJam, to expand into those other team members. So now not just the core group, but maybe your marketer wants to come in to use FigJam for their brainstorm, or maybe your sales team, or maybe your customer success team is even using FigJam. So that's how they're infiltrating into a company and they're creating company-wide retention, which ultimately is the name of the game.

10. 33:55 – 37:10

    Layer 6: Monetization

    1. AGAakash Gupta33:55

       Now let's move to monetization. We've already touched on monetization quite a bit, right? Is there nothing else I can say about it? Well, there's two really important areas that we haven't double-clicked on that I wanna talk about. The first are your pricing tiers. So we talked about, you know, standard, business, enterprise we saw, or we saw teams, pro, enterprise for Notion. We've seen these different models. We need to double-click on those tiers for a second, and then we need to talk about your pricing model. So a lot of people have just stepped into legacy seat-based pricing, right? $50 a seat. Well, nowadays the trend has been, over the last six years, that almost 50% of SaaS companies have either usage or hybrid-based pricing in addition to that seat-based pricing. So let's look at another PLG giant, because I wanna give you guys that history lesson, that mental model of who were the PLG leaders. In 2018, Trello, they were, like, one of the things that everybody wanted to be. In fact, in 2017 when Atlassian, the original PLG company, acquired Trello, it was like, all right, millions of case studies then written on Trello. So what did Trello do? They had three simple tiers, and they had freemium entry to those tiers with very limited features, and then they had this thing called power-ups, which actually is still very effective to this day. It was a very cool upsell m- feature that they had. And then they had this organic growth. But they didn't have an aggressive cross-team strategy. If you look at a company like HubSpot, you know, a lot of people talk about Apple stock, they talk about Tesla stock. I think they should be talking about HubSpot stock. If you had bought this one, this is, like, a 17-bagger for you, right? This is a stock that has put on a master class in public markets for a long time. So I've shown their pricing page here, but I actually want you to look over at the right bar. So what do they have? HubSpot has now created products for, like, every single team. Your sales team, your marketing team, your customer support team. And within each of those markets, sales tech, marketing tech, they're creating products in every space. So in sales tech they recently just released, like, data enrichment. That was a space they hadn't gotten in for the longest time. As you guys all know, the big driver for HubSpot has been creating a CRM, a free CRM. So initially they were just a marketing tool. How did they get into sales? They created the CRM. Then how did they further monetize the sales team? Data enrichment. So they basically layered on products and use cases across the org, and that is really, really important. The other thing that HubSpot does much better than your older companies in 2018 is thinking about enterprise features. So HubSpot initially started as an SMB-based company, but now a lot of mid-size and enterprise companies are using them because they always nail that enterprise functionality, the stuff like rule-based access control, the basic boring stuff that enterprises really need. So the 2018 playbook, things like power-ups, those worked really well. So that's monetization. Now I wanna talk a little bit about expansion, and I think this is probably, outside of free-to-paid conversion, the most neglected.

11. 37:10 – 40:29

    Layer 7: Expansion

    1. AGAakash Gupta37:10

       Like, I would like to see after this talk that there are more product growth teams focused on expansion because, as I mentioned with the Snowflake example, this is where you get a lot of leverage. You don't have to then spend so much money on your expensive outbound sales motion if you actually expand. And the two surface areas that you wanna think about are additional features, things like the AI functionality that we saw with Notion, and cross-user expansion, things like the other departments we saw with HubSpot. So let's rewind to SurveyMonkey. This was another one of our 2018 IPOs, another PLG company. Uh, and things didn't work out for SurveyMonkey since their IPO in 2018. So they, uh, had a disastrous rebrand to Momentive, then, uh, they were actually bought by the PE firm, uh, STG, and then rebranded back to SurveyMonkey. So what did they do, right? They had these freemium models with tier upgrades. They had feature gating, but they had limited customization of plans. In particular, if you think about their, this pricing page, what's kind of missing is, like, the entire team concept, the entire seat concept, and there's also no usage or hybrid pricing. I might be a little biased here because I was VP of product at this company, but take a look at Apollo.io. So while I was there, we became a unicorn, over $1 billion ARR. We hit, surpassed over 40,000 paying accounts. How did we do that? So we had that tiered pricing. We had freemium. We had free trial, all the stuff we ha- we mentioned before, but look at the very bottom of our pricing page. We have this usage-based pricing that I also mentioned in layer six really come to the forefront. And I can tell you internally, having been a VP of product, most people are using this dial on the bottom to buy more data. So let me just explain what that is. In Apollo.io, Apollo is basically, after LinkedIn, the best contact database in the world. So, uh, people might buy 15 seats with the section at the top based on their tier, but in addition, they might buy an additional 100,000 contacts, and so they're able to buy those contacts with that s-slider. And what's not even shown here is they might be able to buy specific types of contacts, like mobile phone numbers versus emails. So there was this huge other vector for us to monetize our customers, and that other vector actually drove 70 to 80% of our expansion. So while your average SaaS company is driving expansion via seats, we're driving expansion via buying more contacts. And we would see people not just buy contacts right when they're signing with us, but month 6, month 11, even when they're renewing, and so it's a very useful vector for expansion. So what was the 2018 playbook? Focus on users. Have advanced tiers with feature gates. Have the seat-based pricing. Don't just focus on users. Focus on accounts and teams going across to departments and add in a value metric-based pricing model, a usage-based pricing so that you have hybrid pricing. Based on the Kyle Poyar dataset, f-from 0 to 55% of SaaS companies adopting this.

12. 40:29 – 42:32

    3 main vectors of change

    1. AGAakash Gupta40:29

       So let's sum it all up. Over the last 30 minutes, we've covered seven layers. We've talked all about product-led growth. We've given you a mental model to organize your strategy, organize your company, organize your teams. We said that you wanna focus on go-to-market. And what's been the shift? It's been a shift from brand messaging, brand advertising to very job-focused acquisition. If you recall, we w- we looked at Slack's competition with email in brand ads versus Canva's product-led SEO strategy. And then in layer two, we talked about the information for decision. So we had that very simple Slack page, and we had those big feature comparison table of Dropbox versus the personalized tables and the personalized messaging that you saw in Canva and Notion. Then we moved into free-to-paid conversion, where we looked at how it's not just freemium or free trial anymore. A lot of it has to do with reverse trial and contextualized billing gates, those magical billing gates that Canva has, which very, very few SaaS do to this day, which actually show you what you're gonna get on the Pro plan. Then there's activation. In activation, we've -- almost every product now has moved away from the forced one-size-fits-all step-based onboarding. So if you're still doing that, make sure instead you have a fork for three to four types of onboarding, and then you customize your in-app homepage to continue onboarding so that you don't just get activation to setup or activation to aha, but you actually get activation to habit, and that's a mental model that's really important to understand. Then we talked about retention, where we've gone from daily use cases for users to expanding to departments, to making sure that the whole company is involved. And what that does is then it allows you to monetize in layer six with flexible monet- usage-based pricing and then expand into those departments with additional products and features.

13. 42:32 – 43:21

    What's changed

    1. AGAakash Gupta42:32

       So what's changed across all these dimensions? If I had to sum it up as three main vectors that over the hundreds of PLG companies I've studied have changed, it's personalization. And I know that's a buzzword you've been hearing in product and growth for 10 years, but I hope now you understand across all seven layers what that personalization actually looks like. And then the second is getting into your whole org, getting into other departments, getting into other use cases within your department. That's your expansion mechanism. And finally, that freemium has evolved. It's not, it's not just about slapping freemium or free trial onto your product and saying you're product-led growth. It's about building the whole ecosystem and creating things like reverse trial so that people get a taste of your premium functionality, and they say, "I can't live without that."

14. 43:21 – 43:43

    Tesla example

    1. AGAakash Gupta43:21

       Many of you guys might be driving, like, Teslas, for instance. What did Elon Musk do in March? He gave you all a free month of full self-driving. That generated 160 million in ARR for Tesla. That's how many people converted into paying users of full self-driving, and that's why companies like Spotify have also taken on reverse trial. So this stuff

15. 43:43 – 44:06

    Outro

    1. AGAakash Gupta43:43

       really works. I hope you enjoyed that episode. Do check out my bundle at bundle.aakashg.com to get access to nine AI products for an entire year for free. This includes Dovetail, Mobbin, Linear, Reforge Build, Descript, and many other amazing tools that will help you as an AI product manager or builder succeed. I'll see you in the next episode.

Episode duration: 44:06