Lessons from Failed PLG Strategies: What Not to Do

👋 Welcome to Inspired Momentum!

Product-Led Growth (PLG) has powered some of the biggest success stories in tech—Slack, Zoom, Dropbox, Notion—but not every PLG strategy leads to growth. Many companies struggle to scale, convert free users, or even survive because they fall into common PLG traps.

This week, we’re diving into:

1. The most common PLG mistakes companies make.

2. Real-world examples of failed PLG strategies (and what we can learn).

3. Actionable tips to avoid these pitfalls in your own business.

Let’s make sure your PLG strategy drives success, not frustration! 🚀

🚨 The 5 Biggest PLG Mistakes (and How to Avoid Them)

1. The “If You Build It, They Will Come” Fallacy

   Some companies assume a great product will sell itself. They launch a free plan or trial but don’t invest in distribution, education, or user engagement.

   💡 Example: Quibi (The $1.75B Failure)

   • Launched a mobile streaming app with no real user validation.

   • Focused on big-name content instead of understanding customer needs.

   • Assumed users would just adopt it naturally—but they didn’t.

   ✅ The Fix:

   • Treat PLG like a growth engine, not just a product strategy—you need marketing, onboarding, and activation strategies.

   • Identify early evangelists and double down on viral, referral-driven growth.

2.  Ignoring Time-to-Value (TTV) ⏳

   If users don’t experience value quickly, they churn. Many PLG companies overcomplicate onboarding or hide their best features behind friction.

   💡 Example: Evernote’s Decline

   • Initially grew rapidly, but struggled with cluttered UI and slow onboarding.

   • Users abandoned the product before realizing its true value.

   ✅ The Fix:

   • Optimize onboarding flows to help users reach the “Aha!” moment ASAP.

   • Remove friction—Dropbox shows instant value by letting users upload files immediately.

   • Track where users drop off during onboarding and simplify those steps.

3. Poorly Designed Freemium Models

   A bad freemium strategy can:

   ❌ Give too much away, reducing upgrade incentives.

   ❌ Gate features too aggressively, leading to frustration.

   💡 Example: Medium’s Free-to-Paid Confusion

   • Switched from unlimited free reading to an unclear paywall model.

   • Confused users, causing churn instead of conversions.

   ✅ The Fix:

   • Let users experience just enough value to make upgrading a no-brainer.

   • Notion’s freemium plan gives solo users full access, but monetizes teams effectively.

   • Use data-driven upsells—offer premium features based on usage patterns.

4. Assuming Users Will Upgrade Without a Nudge

   PLG companies often expect free users to convert on their own—but in reality, most need well-timed nudges.

   💡 Example: Trello’s Early Monetization Struggles

   • Grew massively but waited too long to monetize.

   • By the time they introduced paid plans, competitors offered better enterprise features.

   ✅ The Fix:

   • Use Product-Qualified Leads (PQLs)—track engaged users and trigger upgrade prompts at the right time.

   • Use email, in-app nudges, and limited-time offers to encourage conversion.

   • Slack converts free users by reminding them they’re nearing their message limit.

5. No Retention Strategy (Focusing Only on Acquisition)

   Many PLG companies spend too much on acquiring free users but fail to retain and engage them long-term.

   💡 Example: Clubhouse’s Rapid Decline

   • Gained millions of users overnight but had no real retention mechanics.

   • Once the hype faded, engagement dropped, and growth stalled.

   ✅ The Fix:

   • Focus on habit-building features (e.g., streaks, reminders, progress tracking).

   • Invest in community and user engagement—Notion’s ambassador program keeps users involved.

   • Monitor churn triggers—why are users leaving, and how can you bring them back?

🚀 Case Study: How Calendly Avoided These PLG Pitfalls

Calendly nailed PLG by:

✅ Nailing Time-to-Value → Users immediately experience how easy scheduling is.

✅ Smart Freemium Strategy → Free users get the basics; paid users get powerful automation.

✅ Using PQLs Effectively → Sales teams engage high-value teams at the right moment.

🎯 Your Takeaway: PLG success isn’t just about launching a free plan—it’s about strategic nudges, activation, and retention.

💡 3 Quick Wins to Avoid PLG Mistakes Today

✅ Audit your onboarding → Where do users drop off? How can you reduce friction?

✅ Improve upsell triggers → Are you nudging engaged users at the right time?

✅ Focus on retention, not just acquisition → Are you keeping users engaged after sign-up?

📣 Let’s Talk!

Have you seen a PLG strategy fail (or succeed)? Reply to this email—I’d love to feature your insights in a future issue!

Until next time,
Filippo

P.S. Know someone launching a PLG strategy? Share this newsletter with them—they’ll thank you later! 🚀