How to Build a Product-Led Growth Flywheel That Scales

👋 Welcome to Inspired Momentum!

Product-Led Growth (PLG) isn’t just about acquiring users—it’s about creating a self-sustaining growth engine. The best PLG companies don’t rely on one-off tactics; they build a flywheel that continuously drives new users, engagement, and revenue.

So, how do you build a PLG flywheel that scales?

In this issue, we’ll cover:

1. The 4 stages of a PLG flywheel.

2. How to optimize each stage for growth.

3. Real-world examples of companies running high-impact flywheels.

Let’s dive in! 🚀

🔄 What Is a PLG Flywheel?

Unlike a traditional funnel, where users move linearly from acquisition to conversion, a flywheel creates momentum—each action fuels the next, leading to continuous growth.

The 4 key stages of a PLG flywheel:

1️⃣ Acquire → Get users into the product.

2️⃣ Activate → Ensure they experience value.

3️⃣ Retain & Expand → Keep them engaged & drive upsells.

4️⃣ Referral & Virality → Turn users into promoters.

Each stage feeds into the next, reducing reliance on paid acquisition over time.

📈 The 4 Stages of a Scalable PLG Flywheel

1. Acquire: Drive High-Intent Users Into the Product

   🚀 Goal: Bring in users who are most likely to activate.

   💡 Best Practices:

   • ✅ Leverage SEO, content, and social proof to attract organic users.

   • ✅ Optimize your landing pages & signup flow for conversions.

   • ✅ Use free trials & freemium to lower the barrier to entry.

   📌 Example:

   • Calendly ranks #1 on Google for “meeting scheduling software,” driving massive organic signups.

   🔍 Your Move:

   • Run A/B tests on your signup page & CTAs to improve conversion rates.

2. Activate: Get Users to Their “Aha!” Moment Faster

   🚀 Goal: Ensure users experience core product value quickly.

   💡 Best Practices:

   • ✅ Use guided onboarding to reduce friction.

   • ✅ Identify the activation metric (e.g., “X actions in first 7 days”).

   • ✅ Send personalized in-app nudges & emails to keep users engaged.

   📌 Example:

   • Slack’s activation metric: Teams that send 2,000+ messages are more likely to become paid customers.

   🔍 Your Move:

   • Track where users drop off in onboarding and optimize the flow.

3. Retain & Expand: Maximize Lifetime Value (LTV)

   🚀 Goal: Keep users engaged and increase account expansion.

   💡 Best Practices:

   • ✅ Use habit loops (streaks, reminders, automation) to boost retention.

   • ✅ Offer team-based plans & premium features to drive expansion.

   • ✅ Identify Product-Qualified Leads (PQLs) and use well-timed upsells.

   📌 Example:

   • Notion converts individual users into business accounts by promoting team collaboration.

   🔍 Your Move:

   • Define your PQL criteria and set up automated nudges to encourage upgrades.

4. Referral & Virality: Turn Users Into Your Growth Engine

   🚀 Goal: Create self-sustaining, word-of-mouth growth.

   💡 Best Practices:

   • ✅ Build viral features (team invites, collaboration tools).

   • ✅ Offer referral incentives (bonus storage, premium access).

   • ✅ Make sharing seamless within the product.

   📌 Example:

   • Dropbox’s referral program (free storage for inviting friends) fueled 60% of its early growth.

   🔍 Your Move:

   • Add a built-in sharing mechanism that encourages viral loops.

🚀 Case Study: How Figma Built a Powerful PLG Flywheel

1. Acquisition → Free plan with no install required for easy adoption.

2. Activation → Teams experience value through real-time collaboration.

3. Retention & Expansion → Upsells to team & enterprise plans with premium collaboration features.

4. Referral & Virality → Users share designs, bringing in new users organically.

🎯 The Result?
Figma scaled from zero to $20B+ valuation with PLG at its core.

🚀 Your Takeaway:
Focus on removing friction & increasing viral loops to build momentum.

💡 Quick Wins to Improve Your PLG Flywheel Today

✅ Identify your activation metric → What signals user success?

✅ Optimize onboarding → Reduce steps & guide users to value faster.

✅ Experiment with referral incentives → Can users invite others effortlessly?

✅ Track expansion revenue → Are existing users upgrading?

📣 Let’s Talk!

What’s the biggest challenge in your PLG flywheel? Reply to this email—I’d love to feature your insights in a future issue!

Until next time,
Filippo

P.S. Know someone building a PLG strategy? Share this issue with them! 🚀