Early Stage PLG Indicators

PLG (Product Led Growth) has been making a lot of noise and many companies are quick to adopt it. You probably know if you are a PLG company that it’s hard to pull off, and for us as investors it’s not trivial to invest in, especially in early-stage. Some SaaS indicators are only partially relevant and some are not relevant at all for companies that are PLG focused or at least too early to measure. Most PLG companies grow slowly in their early stages, because it takes time to build a community of free users and convert them to paying customers. Not only should the company focus on the product value, but also on onboarding, self-serve, and expansion all led by the product. Early stage as we define it is a period of 18–24 months from the founding date. During this important period of time, the company needs to decide on a G2M and product strategy that will support its PLG-driven decisions and also optimize its achievements to the next round of investment (if this is the plan). The company will begin with its core product and value proposition, but how much will it invest in optimizing it versus working on self-onboarding, self-serve, and analytics-driven decisions? What about product expansion? How do marketing and sales play a role in all of these initiatives? Do they self-serve/onboard from the start? In terms of importance, which is more critical: active users, usage, logos, or conversion to paying customers? Do teams work as silos or are they starting to work together as a unified product center? Which is the best path to market fit? These issues were discussed quite a bit with our PLG portfolio companies, close(founders) friends, and new PLG companies that we met. In light of all of this, our main question is: How can we tell if we are on the right path to product-led growth at an early stage? We created a list that provides a number of factors that can help lead to an informed discussion of early stage PLG companies, enabling founders and investors to gain a better understanding of the company’s prospects. The discussion is not about right or wrong; it is meant to help understand the company’s present and future. The indicators were clustered by products, teams, KPIs, and G2M, and benchmarks were added when possible. We focused on metrics that could highlight discussions, but there are many others. I look forward to learning more about what you as a founder use for your PLG criteria. The cumulative market capitalization for PLG companies has grown more than 100x in the last six years. In Israel we all know about monday.com, Snyk and Wix.com, but at least 10 out of the unicorns in Israel are PLG companies, and a dozen PLG companies raised A+ rounds this year. There are also MANY PLG young companies in Israel (mostly Devtools). Some of these Israeli PLG companies are listed in our map.#Productledgrowth EverAfter Aporia Acumen.io anecdotes Aspecto Bites DagsHub Guidde Livecycle Tensorleap Seekret Swimm

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