Building PLG motion for your SaaS

Yash Shah (00:00.654)

Okay, shows that we're live. Let's wait for a couple of folks to join in.

I posted it on my page too this time. awesome. OK, we have people joining in. So we're definitely live. Awesome. So hello and welcome to Momentum Officers. My name is Yash, and I'm joined by the leadership team at Momentum 91, Shane, Jay, and Kaushik to discuss topic of the week, which is implementing PLG, or product-led motion, product-led growth motion, for your SaaS product.

Our goal with these sessions is to provide you with actionable insights and practical strategies that you can apply to your own products. Throughout the session, we encourage you to engage with us by asking questions and sharing your thoughts. This is a fantastic opportunity to learn from each other and gain new insights that can help drive your SaaS initiatives forward. Hey, Shane's doing a thumbs down. I know. My hands are moving. My hands are down.

The streaming software might have read your mind. Okay, let me try this as well. No, it doesn't work with me. Okay. don't know. Yeah, maybe. So with that thumbs down, let's get started. Jai, Shade, Kaushik, how are you guys doing today? Absolutely well. It's been a busy day. of meetings.

Living life in the UK, loving life as usual. Normal for me. Awesome. Great to hear that. So let's get started Jay. What is a PLG motion? What is product led growth? Let's start with the basics. So just to give you a simple definition, basically any product is getting sold in any market, it's work and

Yash Shah (02:01.87)

and then from there you know people get introduced, user gets introduced to the products and from there things happen so once people have used the products based on that so they basically get sold but when it comes to product led growth all about product in itself selling it there is no actual CSP where this product is purely is in itself available to the user to test it and based on that

The product is built in a way where the product itself looks like that. There seems to be an audio issue. Kaushik, are you on mute? Yeah, I am on mute. I was on mute while he was talking. Jay was speaking. Okay, I don't know why but there is an audio issue, Jay, with your... Kaushik, was it the same audio issue with you as well? Yeah, yeah. Few places it was down.

volume was down. Got it because we couldn't hear the sentences so Jay let's see if we can make it work this time or else we'll figure out another way. Yeah, so I'll just reiterate a shorter definition of product. When product, especially SaaS product in itself when it's able to sell it without the help of any salesperson or any other person involved.

That's where we call it a product led tube. So it's a vast concept but we can break it down in the coming questions and you know. Can you, let's check the audio once again. Are you connected to the right mic?

Yash Shah (03:52.194)

You connected to the right mic? Yeah, I am. Are you able to hear me now? We are able to hear you but then once you start to say a couple of sentences it goes away. But that's okay. That's fine. We'll figure out a way to make it work. I can answer questions. Is my audio okay? Yeah, it's good. Let's flip it. Let's see if I can try and answer.

answer the questions for these sessions and in the meantime if the audio starts to work then they will flip the script again. Yeah? Got it. Awesome. So what can I answer for you today? Shane, do you know what is PLG Motion?

The product sells itself. People love the product. It sells itself, right? So that's a great point because your answer includes a question that I should cover in PLG motion as well. So it's very big confusion that people might have which is that a PLG motion is the same as self-serve motion. So if the product sells itself, that is a self-serve motion.

The expectation is that a user or a customer will discover the product by themselves. They land onto the website. They'll read the brand promise, whatever value or benefits that the products are going to offer, sign up to the product, use the product, like it, and then upgrade or purchase it. And then that's sort of the sales cycle, which is what the, which is a self-serve product, right? A product-led growth motion, a PLG motion is where you specifically

design features within your product that will encourage your existing users and customers, whether it is self-serve or not, but it will push your existing users and customers to add more people, to bring you more users and customers. And so like the biggest or the best example that I can come up with in terms of the difference between most self-serve products are also PLG Motion and most PLG Motion also work in self-serve. But a unique example

Yash Shah (06:07.02)

of how these two are different are the example of like the difference between Teams and Slack. So both Microsoft Teams and Slack are self-serve. So you can sign up to both the products, can invite your team and you can start using both of them. But Slack specifically has built certain features within the product, which allow you to create multiple workspaces, join multiple workspaces.

have different avatars and profile pictures and even email addresses for joining multiple workspaces and that is why you will see that a lot of people, so like a lot of people are part of communities on Slack. A lot of agencies prefer to use Slack to communicate with their clients because that way the agency team members can either be added to the client workspace or the client team members can be added to the agency workspace and so on and so forth which is very difficult to do in Microsoft Teams as an example.

Slack has specifically built those features which push you or which make it extremely easy for you to work and collaborate and chat with as many people as you want and that in and of itself gets the growth. That's how most people get introduced to Slack because they are a part of a community. That's the first point for them and then they go ahead and create another workspace and then add a couple of people and then get started.

That's really interesting. my God, of course. You learn new things every day, right? And I think that's really important because, I thought it was, I generally always tell you here, like an exact definition from somebody who's in the space. did, I always, so let's say, all right, so let's say then, let's play an example. An email tool that we use.

Smart Lead, let's just drop the name, Lead, no need for a promotion, but Smart Lead is a tool where you can send multiple emails, but they have a community, you can have an agency use it and have multiple workspaces. So is that PLG or is that self-serve? So that is both self-serve as well as PLG. So let me give you another example of a product that is self-serve, but not necessarily PLG.

Yash Shah (08:30.956)

Another example of a product that is self-serve but not PLG is as an example Netflix. Netflix is a SaaS product. essentially go there to, it's an OTT platform, which is a subcategory. But you go over there to consume content. It is self-serve. You sign up to Netflix, you pay for it and then that's pretty much it. But an existing customer, Netflix has no features, which is where an existing customer of Netflix helps them get more customers of Netflix.

within the product and that's why they're working on things like watch parties and stuff like that which helps existing users and customers bring in more people and that's what you will see in Facebook Messenger, that's what you will see in WhatsApp, that's what you'll see in all of those so as soon as you add a contact in your phone, WhatsApp will have a button that says invite to WhatsApp, WhatsApp has no business doing that.

We still will say if that person is, if the contact that you've added is not on WhatsApp, it will add a messaging, add a call to action saying invite to WhatsApp. And so, so they want the existing users to add more users. All of these platforms are still self-serve. But then there's an element of PLG motion as well. And then there are examples of, of course, of platforms that are both, that are neither PLG nor self-serve. And so, I mean, the famous examples are SAP, Salesforce,

Oracle, all of these Microsoft dynamics, all of these are neither self-serve, they're neither PLG motions. then there are examples of all of these. ChatGPT is a self-serve for sure, but they don't have PLG motion. They don't need PLG motion actually, they help you brag so much that word of mouth is good enough. But the product team, yeah.

That's very interesting. I had no idea at all. First 10 minutes jam packed with knowledge. It's done again. My hands are literally on the table, resting on the table. It's not like to me today. It's reading your mind. It's got to be that. I had one question and if my audio gets fixed automatically,

Yash Shah (10:50.446)

would love to answer that myself as well Seems like it is fixing but please go ahead Ok, so the question is very basic that let's this is a SaaS product and let's say earlier it was sales led motion but now you know let's say the founder wants to get started with product led motion around it so what are the preliminary steps that the person should take and should they stop eventually with the sales led motion or how could they do?

So that's a great question. I don't think that both like a SaaS company can have both a sales led motion as well as a product led growth motion. It's not necessarily that you have to pick between the two. That's something that I would say for sure. But however a good way to think about it is that a lot of companies are forced to do PLG. The goal of PLG is not necessarily to acquire customers.

The goal of product led growth is not to acquire more customers, it is to drive the customer acquisition cost down. So it is to aid the sales people, is to aid the marketing people with more leads, with more prospects, with more deals, with more sign ups, with more active users, whatever the case may be, to drive the product cost down. One way, sorry to drive the customer acquisition cost down. One way that a lot of companies do this

is by creating a free forever version. So which is a version of the product that is available for free. There are certain limitations on top of it. It's available for free and a lot of people essentially end up using it which is what I think Chad GPT also did. That up to a certain extent, up to a certain amount of credits, you have access to it for free and then you have to start paying for it. So that is a great first step. If that's a possibility, then that's a great first step. Another thing

that a lot of companies also do is, especially when they move from sales-led motion to a product-led growth motion, is that in sales-led motion, migrations are done and offered as a service. So when a salesperson is selling, they'd say, okay, here's like $15,000 of your license cost and $20,000 to migrate you and your organization and to train you and your organization from whatever software that you're using to our software.

Yash Shah (13:16.768)

In product led growth, migration also has to happen self-serve. So that's another area where a SaaS founder or a company should and think about investing in. So as an example, if I'm moving from Asana to Notion, can Notion have connectors built in such that all of my Asana data can be brought into Notion, all of my ClickUp data can be brought into Notion, all of my Excel or CSV data can be brought into Notion because now

Since there's no salesperson who's going to be facing the customer and it is product-led growth, I will have to migrate myself. So that's the second area. The third would be a lot of times if it's sales-led motion, the pricing is not public. And so that's another area to focus on. You'll have to design a lot of pricing experiments and you'll have to put a pricing that is public and build your upgrade journeys and your downgrade journeys and your policies, all of those things like monthly, quarterly, annually.

What sort of a discount do I get if I go for an annual plan and stuff like that. So that's another area that they'll need to invest in. Fourth and most importantly is that they will have to build a new onboarding. So when people are signing up at the time of onboarding, they will have to have nudges, which is what helps them invite their colleagues and their coworkers and create their first project or create their first few tasks.

whatever the case may be, right? Or upload their first few files if you're Dropbox and stuff like that. So that's another area that they should invest in. These are all the things from a PLG, like moving from a sales led motion to a PLG motion. There are a lot of other things in terms of building your referral programs, giving your existing users some benefits for referring or bringing in new people, allowing users to create assets that are valuable when they are shared with other people.

things like that. think that's more valuable. But Jay, let's try with your audio once and see if I missed any points. Yeah, sure. And one small point I wanted to add to that would be to build an additional app on the market in the of another giant who is into a complementary certain processing. So, that could bring a lot of value. the traditional way would be to just scrape the data from who are actually users for that particular

Yash Shah (15:39.99)

product which is providing complimentary services and reaching out to them that, we are providing you this additional, this is which could add great value to you but rather than that building an app in itself in the marketplace where you know the availability is. So from there it would be a great, add a great value and the product in itself could bring definitely a lot of users so that definitely would make sense. And with that answer I think your audio is also back so we're all good somehow. Let's see, Kaushik, Kaushik what do you think?

Yeah, so I was actually thinking about this fact that I mean, it's an open question to both of you is that it is a virality aspect associated with PLG products. If you think that which helps them, there is a need for the user to bring in more user and that should happen seamlessly. And we didn't speak about the, you know, factors of onboarding, like you rightly said. So I was, so if onboarding referrals, like Jay has mentioned one.

point about building a version of it on another person's marketplace or other big players marketplace or even templates for that matter. I think Canva does it very interestingly where you could create templates and you could publish those templates and people could again use those templates and you know they're more engaged within the same platform. So if these are certain frameworks, so is there any other framework like identified

proven frameworks that we know that one could implement within their self-serve model such that the self-serve model moves from self-serve to the PLG model. So great question. So first of all, we should look up to the main pillars that drive PLG, right? So talking about basics, the first thing would be to have and at any point of time from user journey starting from

I could not ignore that. starting from, you know, I will talk about the funnel also. From there we will be able to connect well. if we talk about PLG funnel, it's basically four parts you can consider. First would be traffic, second would be acquisition, third would be activation and fourth would be revenue. And we will discuss the same in detail but to answer your question, the main pillars that we will try would be the first, that would be design. It's extremely user centric design which is being

Yash Shah (18:04.546)

kept in mind. mean, without PLG, it's a user-centered design, then in case of PLG, what happens is even more emphasis is given. So more amount of time being invested in, know, optimizing that how, kind of users are going to be there and how we can add value to them. The second would be to provide them value before even capturing it. So by that, I mean, even before collecting money from them, the more goal would be to give them the maximum value from the product itself. So for instance, if you look at Calendly,

I don't think anyone would have, there would be very few people who would have started using Calendly directly from a paid subscription right, everyone starts using a free version of it and then from there it gets started and if you look to other people using Calendly and you feel like I also want to use it so those are the features and then there is a branding on all aspects so the design part comes very important and then the second would be giving value upfront and the third I would say is

you can say the focus completely is like you know the product means the investment is done in the product in a way that only focus is PLC is a GTM so as mentioned CTAs will be such that you know product is itself telling you that hey quickly migrate apart from here to here so you can get that process done and likewise the copy also is something which becomes important and the way

Yeah, I think Calendly is a great example of a PLG motion done really well. A free forever version with a branding of Calendly that a salesperson will always, they just keep on distributing it to as many people as it is humanly feasible. A lot more people come, get access to their... So this you can see.

in your Ahrefs reports as well for Calendly as to what drives the most amount of traffic to their website. It is through the branding that they have done on the calendar that a salesperson is using it for free. The other couple of places where you can also look for a lot of PLG examples are like 85 % of Chrome Web Store as Jay pointed out building apps on marketplaces. So 85 % of apps on Chrome Web Store, on HubSpot Marketplace, on Salesforce Marketplace, on

Yash Shah (20:32.142)

on Google Apps marketplace for Google Apps for work. Almost all of those apps are those companies doing PLG motions, right? Trying to getting existing users to get more customers. But Shane, do you have any questions around PLG? I am purely a spectator on this topic to learn. Here's another question that I have for

implementing PAG, what are the set of, like if I want to look at a North Star metric for my SaaS, so let's take a case, because it will be different for different cases. But if I'm running a SaaS product, starts at $9, goes up to $49 per user, average ticket size is $15 per user. And so I cannot have a safe leg motion, at those pricing, cannot afford a safe person. And with that price point, I want to deploy PAG.

What are the top two or three metrics that I should measure? Which if they are doing well, I know that my PLG motion is working. And if you can share those metrics with some industry benchmarks in terms of conversion rates or whatever those are, if you can share those, Right. So to answer this, I'll again come back to the funnel that we discussed, right? So because when we are talking about metrics, we want to understand each and every aspect with respect to funnels. I mean, there a of people talking about that in PLG that's not about funnel, but it's not that everything.

basically gets converted into funnel and that's the right way to look at it when especially growth is concerned. So talking about the four main parts, the first part the entry point is the traffic. So even if we are talking about low tickets as and it's just PLG motion. So what we will do is the first part of the funnel would be traffic from there. The next part would be the acquisition.

At times people do get confused between these two but traffic in itself is not acquisition Acquisition is where person is finding value or some interest in by just signing up to the free trial or just purchasing the initial part and likewise so the first would be traffic the second would be acquisition once the acquisition is done now the third part would be the activation because it needs to have the value the aha moment of using the product which Kaushik has been talking a lot of times

Yash Shah (22:55.254)

in our earlier sessions. that's the third part and from there... For the first few days, I thought Kaushik's name is Accelerate Time to Value. That's the only thing. Every SaaS founder that we were speaking to, Kaushik would always talk about, know, I'm going to design the onboarding in a way that it will accelerate your time to value. Accelerate the time to value. So that time to value is, I think what you're referring to as the aha moment, right? The first...

ROI that you get from that the customer the user feels or gets from the software. Get the value as quickly as possible. Yeah, so in fact the time to value in PLG leds has compared to the traditional has is definitely barely different. So in earlier case your traditional way of selling it, it takes two to three months for closure to happen in that in that even the time to value also takes time because there is no much availability in demos or likewise when it comes to so

in there it's months over here it's again reduced to minutes and it has to be designed in a way where it's reduced to minutes so coming back to the earlier question the first is traffic the second is acquisition or is activation and the fourth one would be you know basically revenue that is a purchase that is happening and even after that if you want to consider because it's a SaaS so again subscription needs to renew and so that renewal needs to happen but typically these four points so coming to the metrics to measure the one if

someone is looking at PLG funnel they should measure percentage conversion from know visitors traffic to acquisition, acquisition to basically activation and from activation you can say basically the purchase part. If you talk about the benchmarks typically we'll say website visitors to signups it should be anywhere around seven to eight or ten is a good number ten percentage

So let's say we have 1000 people visiting the website out of that at least 100 if they are converting to sign up, sorry even 90 are converting to sign up that's a good number. From there, from you know acquisition to activation in itself again comes out to be anywhere around 15 to 20 percent and from there the people 15-20 percent which you have converted from there again this number varies from

Yash Shah (25:15.374)

platform to platform, am just talking in general with respect to low ticket sales which your ticket are. So this is for $15, $15 average order value per month right? Yeah, that's right. So anywhere from 15 to 20 percent activation and from there you can say the people who have signed up from there we compare that percentage with purchase and that should be anywhere from 5 to 6 or 7 percent is max which we can observe. So anywhere between 5 to 7 percentage. These are the industry standards.

And this is extremely important and interesting, right? Because, and you had a client at Momentum who had, you know, huge amount of traffic. So like the top of the funnel was extremely amazing. And we, as an organization that offers SEO and organic inbound services, this is true. I think it's...

It's got to do something with your ear and the airpods in your ear. has to be. Yeah, because everything I do is a quick little twitch. I think this is good, right? It gives me reality check every five minutes. So I keep my answers also shortened into the video. So this is good. But so what I was saying was that a lot of like we had a client who had

tremendously huge top of the funnel and then and a lot of people are signing up as well an extremely poor conversion. So just to give you some context, had 5000 people a little more than that visiting their website every week, unique 5000 people visiting their website every week out of which they were able to see about 450 to 470 people sign up to their product every week and they were seeing one or two conversions a week which is a tremendously big problem.

And so one of the things that we started to realize was that they had completely focused only on getting top of the funnel, top of the traffic. And in that, they had started attracting the wrong sort of customers. These were not their ideal customers. These were, you know, small tangent who might or may not have use case for their product. And that was a tremendously big challenge because we started to realize

Yash Shah (27:35.638)

Because when you first start to get some traffic through SEO, you start to get excited and then it slowly builds over a period of time. You think that your marketing team is doing really well, you actually try and solve the wrong problems. Because for three or four months, they were solving the problems within the product. And as it turned out, they were talking to the wrong customers. They were attracting the wrong customers. So this is sort of an cautionary tale as well. Akshay, any questions from your side? Ajay, you want to add something to that?

Yeah, the point is I was actually trying to understand one critical thing. So I was, it has a connection. So I was trying to read this article by Paul Graham and I'm pretty sure many would know that do things that don't scale where the whole article is that, you know, when you're starting your initial stages of your firm, it is very important for you to manually onboard your

users in the starting phase. So which sounds more to me like a sales led growth than the PLG growth. So now I assume that and it is proven that all great all big startups and all more successful ones that turned out to be started at their initial stages by manually getting their users in pretty much in the sales led format. Now what indicators do you see?

What are critical indicators that you see in a particular product that signifies to you that this product is ideal to move to a BNG? And at what stage do you think it is the right indicator? When do you see that?

Could you come again for the last point because the last part of it. So what are the critical early indicators that a product is suitable for DLG model? Like especially in SaaS. we already kind of answered that earlier. If it's a low ticket SaaS, it's, you know, first early indicator would be if it's a low ticket SaaS.

Yash Shah (29:48.153)

having sales person to sell anything from $9 to $49 would be very cost effective because a lot of amount of time will get involved in just getting the whole of sales process done. in that case, if your product is low ticket, should in itself, you know, should be considered ideal for PLG. The second would be, I mean, a lot of things can be considered, but the things that come on top of my mind would be low ticket along with that, you know,

The product should be such that you are able to offer certain things for free and like if it's an ideal freemium model that you can provide that is something which can be considered in PLG part as well. See there are lot of things to be considered when we talk about PLG what happens is you see lot of people talking about product like growth failed, it didn't happen, it didn't work well. What people typically see is pricing, strategy, model and offer.

is out there which comes out as an output we see successful SaaS company doing good PLG and see what is going on, what is the up all of those these are the points we can see but the main thing what is inside the iceberg I would say is team, understanding of users, the right set of users, the strategy, how you will implement the same and another would be what sort of data you are targeting upon

Again we need data to be targeted for at least website so the first part traffic so again targeting a one and the fifth one will be processed. What sort of process you are doing? And so just to the point Kaushik that you mentioning about doing things that don't scale and I have seen a lot of founders misunderstand and misinterpret this as well. So there is a difference between scale and scalability. Scale is basically something that has already achieved a certain amount of scale.

in and of itself. like in India there's a company called Reliance which is extremely big for US and think of Walmart. So Walmart has scale. Scalability is a little different. Scalability means something that could be at a small scale, medium scale or large scale but it has the ability to generate disproportionate returns. So for X, I'm sorry, like a great example of a scalable

Yash Shah (32:12.997)

thing is WhatsApp. So WhatsApp was eight people when they were a million users and they were 30 people when they were a billion users. And so while their customer or the user base skated 1000x, their team strength essentially skated 3.5x. And so that's the largest input cost that they had at that point. So that is scalability. So even at eight people and a million users, they may not have achieved their scale, but they were a scalable thing.

And so when Paul Deham says that do things that don't scale, what he actually means and that he's clarified in the essay and the book as well is that don't automate your customer support. Don't use AI for your customer support. Don't outsource your recruitment to a third party HR. Do all the interviews yourself, even though it doesn't scale. Talk to your customers a couple of times a day. Again, that doesn't scale, but you do all of those things.

I mean, if you can write code, write code. If you can do UI, UX or design, do those. You can get on sales calls. Don't hire a salesperson and assume that it's all going to work out. those sales calls. So he's essentially asking and pushing founders to do things that will not scale with time up until the point that they have the first hundred customers who can't live without the solution. Up until the time that first hundred customers have fallen in love with.

and then introduce measures and ops or whatever it is that will make things kill everybody. But I hope that's helpful and that clarifies as well. So PLG is not against do things that don't stay. you should implement the PLG motion and implementing a PLG motion is more of a business model and a financial decision rather than a strategy decision because

If I'm selling something that has $2,000 or less in annual contract value, I cannot have a sales led motion. It's just not possible. implementing PLG is a financial decision. Implementing it well is where companies like Momentum come in. So if you made a financial decision to go ahead with PLG, then do reach out to us. But I think that's any closing remarks? Shane, Kaushik, Jay, before we close the session out.

Yash Shah (34:41.391)

No, I guess it has been an interesting conversation. We covered lot of topics with respect to PLG. At times one small confusion that happens is that big companies even having low ticket size, they also could have an enterprise plan which the price is not mentioned upon. There was one question which I read that how do they manage it because they have PLG as well and they have sales people as well. So in these cases what happens is one good way let's say a company starting

targeting bottom of the pyramid and eventually going up to you can say enterprise clients later on because that's where large amount of money comes from so if that's the goal what one could do is start PLG motion establish it and then eventually end up getting the right set of data from there and figuring out who are the right people who will be able to provide it at a larger scale and that's where they involve the sales people so initial

initial steps there is a complete PLG from there up till the trial part, right side of people can be followed and from there sales team starts engaging and that's where you know the selling of enterprise products happen from there itself. Yeah, absolutely. Absolutely. So PLG I think is a joint function of marketing and product and sales is a function of sales and these people don't talk to each other. So that's how they manage it. They don't eat lunches together. They don't see each other in offices.

sales people keep on travelling, going to events and conferences and doing the pitches on video calls and things like that. Marketing people continue writing blogs and they just don't need to see each other every day. That's how they manage it because both of those live by extremely different philosophies. And the sales team says we want predictable revenue, the marketing team says we want scalability.

And so that's always a great and a very healthy tug of war that always needs to continue happening within the organization. We see a bit of that happening at Momentum as well, while we try to scale our own business, which is healthy and meaningful. But with that, we've come to the end of this conversation. Thank you for staying with us. Thank you, for answering all the questions on product-led growth for SaaS firms. I hope you found that.

Yash Shah (37:08.335)

meaningful and valuable points. If you did, please go ahead and subscribe or follow or comment wherever you are. We'll make sure that we'll be coming in live next week, next Wednesday, same time, same place. We'll see you soon. Until next time.

Yash Shah (37:31.045)

Hey.