Lessons from Kyle Poyar

On Product-Led Growth (PLG)

On the definition of PLG: "PLG is an end-user focused growth model in which the product is front-and-center in how you acquire, convert, and expand your customers." [1]
PLG is not a replacement for sales and marketing: He clarifies that while the product is central, "PLG doesn't mean that product management leads everything, it just means that the focus is on finding ways to get the product into the user's hands (so they can try before they buy), helping users be successful in a self-service manner, and eventually bringing people in to accelerate the flywheel.” [1]
The importance of the initial user experience: "Once you have a way for the end user to just jump in and start using your product, the next step is really honing in on their first 30 to 45 minutes with the product." [1][2]
PLG requires a cultural shift: "If you have a product that's normally gated behind a sales conversation, pricing that isn't transparent, and no rapid onboarding or end user-focused model, and you suddenly launch a self-service funnel, things can go wrong." [2]
The challenge of PLG marketing: The PLG funnel math can be challenging. For every 1,000 unique website visitors, a freemium PLG product might expect 90 free signups and only 4-5 paying customers. [3]
PLG companies have better recession protection: SaaS companies have performed well despite recent market challenges, but PLG companies have been performing even better than the broader SaaS Index. [1]
On the evolution of PLG: Poyar explains that PLG emerged around 2010 as a response to changing customer expectations, driven by the consumerization of software and the shift to cloud-based solutions. [4]
PLG metrics to track: He emphasizes the importance of measuring user activation, user retention, and the conversion rate from free trials to paying customers to understand the effectiveness of a PLG strategy. [4]
The reality of PLG implementations: Behind each successful PLG story, there are often multiple failed attempts. It's a process of continuous iteration and learning. [5]
The "reverse trial": Poyar highlights the "reverse trial" model, where users get the full-featured experience upfront for a limited time before moving to a free, feature-constrained plan. This was successfully used by companies like Airtable. [6]
PLG doesn't mean no sales: Even famously product-led companies like Atlassian eventually build sales teams to handle enterprise needs and complex buying processes. [7]
Integrating sales with PLG: "Sales doesn't have to be in conflict with product-led growth. In fact, sales reps often enhance the user's experience by helping guide them through the buying process rather than forcing them to go it alone." [8]
Product-Qualified Leads (PQLs): While PQLs are a good starting point for sales in a PLG model, it's crucial to remember that product users and buyers within a large organization are often different people. [8]
Data-driven vs. customer-driven: "Product-led companies tend to be data-driven rather than customer-driven. Sales' experience can bring PLG companies closer to their customers." [8]
PLG and the customer journey: When integrating sales, the first step should always be to map the customer journey to understand where sales can add value without creating friction. [7]

On Pricing

Pricing is a powerful growth lever: "Pricing is your most powerful and most immediate lever to accelerate growth. It's also the most mysterious lever and one that doesn't get the attention it deserves." [9]
Don't be too cheap: "One prevalent mistake in SaaS startups is undervaluing their offerings. Although common in the early stages, remaining too cheap hampers capturing the value created." [10]
Pricing is never "done": "Pricing is not ever 'done.' Willingness to pay evolves with your offering, changes in customer preferences, and macroeconomic developments." [9]
The importance of the value metric: "Selecting the right value metric in SaaS is akin to navigating a complex chessboard of customer value and revenue capture. Once set, altering this metric becomes a herculean task." [10]
On usage-based pricing: "Really do the work to figure out what are the one or two usage-based metrics that correspond with the value your customers see." [11][12]
The evolution of early-stage pricing: In the very early stages, companies are often "purposefully underpriced" to encourage feedback. As the product matures and demonstrates ROI, prices can increase significantly. [13]
Align leadership on pricing objectives: "Before any pricing study, you should align leadership and make sure to define explicitly what your objective is, and what success would look like. This turns political and tense decisions about pricing into rational, calm, data-driven decisions." [9]
The impact of pricing changes: Data from OpenView's research shows that 98% of pricing changes had either a positive or neutral impact on growth. [9]
The future of pricing is hybrid: Poyar predicted a move toward hybrid pricing models that combine different elements to better align price with value and provide flexibility. [14]
Don't price on a declining metric: He gives the example of call minutes, which have declined over time. You'd rather price on a metric that is expected to grow, like data usage. [11]
Freemium as a pricing strategy: "I think some element of a free product or some sort of free self-service experience and then paywalls after the user or the customer has found value. I see that as so important to keep up with the modern buyer." [15]
The "ideal" pricing model: Poyar points to a model like Twilio's, which starts with pay-as-you-go for developer-friendliness and then offers volume discounts for commitment as usage becomes predictable. [15]
Static pricing is a mistake: The market and your product are constantly evolving, so your pricing must also be dynamic. [10]
Make it easy to buy: Complexity in the purchasing process is a common pricing mistake that can deter potential customers. [10]
Achieving product-market-price fit: This is paramount. It's not just about a product people want, but a need they are willing to pay for to sustain a profitable business. [10]

On Go-to-Market (GTM) and Growth Strategy

Treat content as a flywheel: "I treat content as a flywheel. And I think that more people need to be thinking that way... a lot of times those [one-off campaigns] can create some short-term boosts in growth but they're not very sustainable." [16]
Focus on your Ideal Customer Profile (ICP): "The clearer you can get about that story the better because you're not going to be wasting your effort you're really going to be focusing what you're doing on the group that's most likely to respond and most likely to buy." [17]
The challenge of outbound prospecting: It used to take 200-400 touches to generate an opportunity from cold outbound; now, that number has ballooned to 1,000-1,400 touches. [18]
Automated outbound is worth exploring: Especially for businesses focused on SMBs or those with a product-led model, automating outbound can be a cost-effective alternative to hiring a large BDR team. [18]
Prioritizing growth ideas: Poyar is a fan of the RICE (Reach, Impact, Confidence, Effort) framework for assessing and prioritizing potential growth initiatives. [2]
Balancing growth and profitability: In the current market, there's a strong focus on managing as close to cash flow break-even as possible and using AI and automation to reduce the trade-off between growth and profitability. [16]
Understanding CAC Payback Period: A high CAC payback period can be acceptable if you have very high net dollar retention (e.g., 120%+). However, with retention below 100%, you need to recoup acquisition costs much faster. [17]
The importance of Net Dollar Retention (NDR): Companies with usage-based pricing can achieve "eye-popping levels of NDR growth," with examples like Snowflake reaching nearly 170% NDR at its IPO. [14]
The rise of the end-user era: GTM strategy must adapt to a world where end-users can discover, try, and adopt software on their own, a core theme of his presentations. [19]
The mistake of being too broad with your ICP: He notes that early-stage companies often define their ICP too broadly (e.g., "Finance, legal, Tech" and companies from "500 to 100,000 employees"), which dilutes focus. [17]
New benchmarks for a new era: Traditional SaaS metrics may not be sufficient for PLG and hybrid models. Poyar has been at the forefront of proposing and tracking new benchmarks. [14]
The impact of AI on GTM: He observes that instead of specialized AI tools for every task, there has been significant consolidation around ChatGPT as the go-to tool for GTM teams. [20]
Don't build in isolation: He highlights the approach of Thena, which engaged with its ICP early through an outbound motion rather than building for years in a vacuum. [18]
Helping users navigate procurement: Even for free tools, users may need help with security questionnaires and legal requirements. Sales can play a crucial role here, enhancing the user experience. [7]
The changing software buying process: "Customers are buying less software than they were a year or two ago... companies are scrutinizing their purchases a lot more." [17]
The future of software is self-service: "To the extent that you can bring some virality and bring like a whole lot of demand for your product through a great free experience... I just see that is very tied into the future of software and technology." [15]
Working with startups is more rewarding: He finds working with fast-growing startups more fulfilling because "they were so open to new ideas. They were very data-driven. They were not bound to the past." [15]
Iterating on pricing and packaging is key: Top SaaS companies are constantly making changes to their pricing and plans, signaling that this is a continuous process of optimization. [22]

Learn more:

Lessons from Kyle Poyar

On Product-Led Growth (PLG)

On Pricing

On Go-to-Market (GTM) and Growth Strategy

Written by Antoine Buteau

Lessons from Paul Millerd

Lessons from Simon Wardley