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  • Writer's pictureMatthew Lerner

The "forever costs" of product-led growth

Unpopular opinion: Product-led growth (PLG) costs more than advertising, and it’s not even close. Hear me out… Ads cost money, but you can turn them off at any time and only have to pay once, it’s a non-recurring expense. Product changes require engineering, which is your most scarce resource. Plus they bring “forever costs” like ongoing regression testing, support, documentation and code maintenance. Each change adds complexity to your codebase and developer workflows, and complicates your product making it harder for users. The larger your codebase, the longer each subsequent feature takes to build, so it slows you down. How to decide PLG is hot and investors will encourage it. But here are a few question to see if it really makes sense for your startup:

  1. Is your product naturally multi-player? Will customers benefit from inviting others to use it?

  2. Is it a self-serve product? Will new users get to the “a-ha” moment easily?

  3. Does your team have the skills to do it well? Can you do great UX design, front-end dev, and rapid in-product experimentation?

PLG requires tenacity. You may need to run 100 experiments before it really starts clicking. So start lean, use a lot of prototype user-testing and false-door tests to optimize flows before you commit to building them. I’m not opposed to PLG under the right circumstances. However, it’s not a one-size-fits-all magic bullet, and it's not always worth the mythical status it's given. Bottom line: PLG is a very expensive decision, and I hope this email helps you make the right call.

Hat tip to Daphne Tideman (her newsletter) for pushing my thinking on PLG.


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pbothwell
Oct 24, 2023

Great article! As a product leader, I endorse this message! Product-led growth can be very powerful - but only in the right circumstances.


I'd add one more consideration to the list: Are your users also your buyers? If not, how much influence do they really have? I've seen smart, well-intentioned leaders, especially in B2B2C, suggest how great it would be to "make the product viral" without fully appreciating that the end users may have very limited ability/influence drive purchase. Yes, unhappy users can drive churn. Yes, a certain amount of virality within an organization that owns a product can help drive usage and even license expansion. However, when it comes to new sales, in these circumstances marketing to the buyer is…

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