#93: Why Sales Led Growth Beats Product Led Growth

Read Time: 3 min

Today, I will discuss whether you should build a product led growth (PLG) or a sales led growth (SLG) motion. I will break it down and explain why an SLG model will crush a PLG model 9 times out of 10, specifically for a Pre PMF early-stage company.

I believe many technical founders default to a PLG model because they don’t fully understand sales, and they’re intimidated by it. The story they tell themselves is the product will naturally catch on and gain full adoption if it is good enough. Rarely happens. What it does do is accelerate burn and frustration, and eventually, you either learn sales or you die. The reality is the best companies combine PLG with sales, partnerships, and marketing to accelerate.

Let me share a use case of a former client, good friend, and founder of a successful company. He built a dev tool to make developers more productive (without going into the weeds here). There were 75k daily active users (DAUs) and 160k monthly active users (MAUs). All free. Not one of them was paying. When he tried to monetize some of the users, very few converted. Less than 5%. INSANE!!

In this issue, I will break down why this happened, how to avoid it, and why a free tier is a terrible option, specifically for a pre-PMF early stage company.

The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.

~ Peter Thiel

If you break down the question of building a PLG or an SLG and look at it from the first principles perspective, many truths will become apparent. I use a framework called RBL (roots, branches, leaves), which boils things down to their fundamental (core) truths and reasons up from there.

Let’s break it down.

What do we know is true of people regarding free vs paid? (Roots/Core truths)

• People prefer free over paid if given the choice.

• People are always looking for a deal (best value & most economical)

• People perceive value based on social proof. (reviews, testimonials, case studies, etc)

• Most users will justify why the free plan is good enough and will not bump to the paid plan unless they absolutely have to.

• For someone to bump up to a paid plan, the difference in value from free to paid has to be robust. And most pre-PMF startups don’t know where that value exists yet.

Next, let’s look at the reasoning that builds off the “roots.” (Branches)

PLG doesn’t work well for early stage pre-PMF startups because of these simple truths.

1. Product value isn’t validated yet → Hard to justify a paywall.

2. We don’t know what that magic lever is that converts →Low conversions

3. No strong social proof → Users hesitate to pay.

4. Users default to free → Conversion rates stay super low.

Lastly, let’s look at how we can grow “leaves” on the branches. (Leaves)

Instead of running a PLG motion, use this framework.

• Test different customer acquisition channels, outbound & direct sales, targeting ICP.

• Instead of a free tier, offer a paid POC that guarantees results or their money back.

• In return for crushing paid POC, ask for case studies to leverage.

• Once PMF is validated (strong conversion & usage), consider adding a PLG (self-service) motion. You’ll then know how and why customers buy and use your product.

I'm guessing I know what some of you might think. What about Dropbox, Notion, Slack, and others often cited as (PLG) success stories?

This perception is bogus and misleading. These companies did not begin with a purely PLG approach. They first achieved (PMF) through direct engagement, manual customer onboarding, and strategic distribution efforts before leveraging PLG to scale. It was very much a SLG/boots on the ground motion.

For every company like them that succeeds, hundreds of thousands fail; they are the rare exceptions. We know that approximately 91% of startups fail, with only about 9% achieving long-term success.

Given these odds, relying solely on a PLG strategy without first securing PMF seems like a lot of unnecessary risk if you ask me. Don’t fall into this trap.

Key Takeaways

• Lead with an SLG motion!

• Remove free tiers → If people would instead use free over paid, don’t give them the option.

• Replace free with paid POCs → Risk-free POC helps validate value before charging.

• Focus on high-touch early customers → Get real feedback & build case studies.

• Generate social proof early → Logos + testimonials → perceived value = better conversion.

That’s it for today!

See you all next week.

Darren

P.S. If you’re a Venture-Backed company interested in coaching, book a call here.

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