PLG almost killed my startup
Product-led growth almost killed my startup.
Here’s a screenshot from the churn survey of my previous startup.
Notice something? The 2nd most common reason for customer churn was "Free plan works for us."
Our freemium approach was unexpectedly leading to our downfall. This realization shocked us.
Despite this, I still believe freemium is a good PLG strategy. To make the most of it, consider two key points:
- Create an Optimal Free Plan: Offer too little, and you won't attract enough users. Offer too much, and you risk leaving money on the table.
At my previous startup, we faced this problem. We thought our free plan was basic, but it turned out to be too generous.
The result? Even our paying customers downgraded 🤡
- Reach Out to Those with Buying Intent: Users signing up for the free plan often do not become paying customers. Usually, they are looking for a FREE solution.
Some of them would have a budget but aren’t fully aware of the additional benefits, so they stick with the free plan.
The result? Missing out on reaching such accounts can lead to significant revenue loss.
Implementing a freemium model needs a careful strategy. It's a double-edged sword. Done right, it can help conquer the market. Done wrong, it can hurt or even kill your startup.
I know there are many pros and cons of freemium and PLG itself, so I would love to hear your thoughts!
