PLG

What could be the best possible go-to-market model for a software startup?

If a startup can build a software that users love and get immediate value from it (by simply starting using instead of renting or owning), those users will naturally become advocates for the product and will help drive growth through word-of-mouth referrals and organic adoption.

This approach — which is known as PLG (Product-Led Growth) — is, of course, a super efficient and cost-effective way to drive growth.

In other words, in a PLG model the product itself serves as the primary driver of business growth, rather than traditional sales and marketing channels.

To implement a PLG strategy, startups typically focus on building a product that is easy to use, provides immediate value to users, and is designed to encourage users to invite others to use the product – free trials (freemium) and self-serve onboarding are often incorporated as product features to help drive adoption.

The PLG model has gained popularity, particularly in the software industry, where products such as Snyk, Calendly, Slack, Zoom and Dropbox have achieved viral growth and bottom-up success through a PLG approach. These products were able to create a huge legion of active users who were then converted into paying customers. Indeed, the affordability and accessibility of PLG-driven software has completely shifted the center of power down to the end user.

Conclusion

Fabrica Ventures has always believed that the best way to start a relationship is to deliver value before capturing value. So, the PLG approach is music to our ears.