Why Your PLG Strategy Will Eventually Fail
Proactive brand investment is the key to sustained product-led growth.
This week, I’m writing about why, when we’re talking about product-led growth, brand needs to be in the conversation.
It’s the 4th edition of this newsletter 🗞️—and it’s been fun to write! There’s an incredible community of people to learn from here, and I’m looking forward to your thoughts on this post.
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Since the term “product-led growth” was coined in 2016 (credited to Blake Bartlett, an investor at OpenView Partners), it has exploded in popularity—entire courses, websites, and books have been devoted to understanding its whats, whys, and hows.
But like I found when I was writing about market fit, most of these resources don’t mention the word “brand” a single time. Take Appcues’ PLG Collective—not a single result with a ctrl+F search. (how about we ctrl+F that? 🖕 lol)
It’s a glaring oversight. Sure, companies have brand teams and talk about their brand, but it’s been left out of the PLG equation. In so many startup environments, brand has been inaccurately siloed as either branding (“logos and visuals”) or brand marketing (“offline awareness channels”). I dedicated a previous post to breaking down the differences (and righting these misperceptions)—don’t keep reading without that foundation.
There are two key reasons why brand has to be part of the PLG discussion:
You cannot separate your product from your brand. They don’t exist without each other.
PLG, like any growth motion (sales-led, marketing-led), will hit a ceiling—and investments in both branding and brand marketing are necessary to overcome the hump of these inflection points.
1. You cannot separate your product from your brand. They don’t exist without each other.
When we talk about product-led growth, we’re implicitly talking about brand too—we just haven’t been acknowledging it. This is the first error many founders make.
Ignoring the role the brand plays in the success of product-led growth motions is like saying you can make an omelet without eggs. 🐓🥚 The product does not exist without the brand.
A second error here is thinking that product-led growth and brand have different end goals. They do not.
Take this example, again from the PLG Collective, which reminds PLG-focused operators that if they aren’t “actively thinking about how to minimize friction at every customer interaction, maximize product adoption, and drive customer loyalty and advocacy, it’s time to be highly concerned about your product-led competitors.”
Hmm…what part of a company is 100% focused on creating mental availability (the degree to which buyers think of the brand when buying and recognize it quickly), minimizing friction, and driving customer loyalty and advocacy? Oh yeah, brand.
But this article and others suggest that these behaviors are purely the product’s responsibility, and if that’s the case, purely the product team’s responsibility. If you’re not thinking about the role your brand plays in minimizing friction and driving customer loyalty, you’re chucking an enormous growth lever over a bridge and flipping it off on the way down.
Branding is everything that a prospect or customer sees—and paying attention to all of those touchpoints is how you create consistency and congruence across them. A cohesive brand experience across all interactions reduces cognitive load for customers, making their journey smoother and more intuitive. Thoughtful branding is also the force behind turning mundane interactions into memorable moments that generate mental availability (think Gusto’s loading screen featuring Penny the pig).
Third, it’s common to see PLG engines sputter when companies aren’t intentional about their brand.
A PLG motion can never work if users don’t “get,” let alone trust, the brand enough to guide themselves through an onboarding flow, or enough to evangelize it to others. Your product’s identity must be one that people are willing to align themselves with, because recommending your product reflects directly on them.
Before we go further, a note on the language we use:
Sales-led growth, marketing-led growth, product-led growth—all the labels we use to refer to the strategies du jour are all ways we ship our org chart.
They don’t matter to our audience.
What our audience cares about is having an experience that recognizes and meets their needs—well enough that they buy again or recommend the experience to other people (which we call “growth”).
While shipping our org chart is generally not useful, it’s worth recognizing that the language we use does very much affect our perceptions of what strategies, teams, and tactics we focus on internally.
Words matter in terms of telling us where to focus our attention, so let’s get a new descriptor into the mainstream: Brand-led growth. Here’s a working definition:
Brand-led growth is a proactive strategy that prioritizes building and leveraging a strong brand identity, values, and emotional connection with customers to drive business expansion, customer acquisition, and retention.
This approach goes hand-in-hand with brand-market fit, which I’ve defined as the degree to which a company’s identity, values, and overall customer experience resonate with and meet the emotional and aspirational needs of its target market (vs. its product functionality alone).
2. Brand fuels sputtering PLG engines.
From LinkedIn’s The B2B Institute’s 2024 report, How B2B Tech Brands Grow: “While the PLG approach has its merits, the evidence suggests that over-leveraging this strategy to chase short-term gains will often come at the expense of your brand’s ability to realize long-term, sustainable growth.”
While PLG gets early-stage startups off the ground, most B2B companies eventually need to go upmarket to monetize. Harvard Business Review has a sharp take on this quandary, which they call the PLG Trap (although it’s yet another article that makes no mention of the brand’s role in either PLG’s or sales-led growth’s success 🥴).
Most growth strategies see diminishing returns—HBR says PLG companies “actually lose efficiency as they scale,” and that takes us to my second point.
PLG companies, without question and whether or not they’re expanding to sales-led growth in particular, need to invest in brand at key inflection points, like:
Changing target markets (i.e. going upmarket)
Scaling and then hitting a growth ceiling
Introducing new product offerings
Facing increased competition
The problem is that most companies wait to hit these inflection points before investing in brand, and then they’re acting reactively rather than proactively (e.g. it’s harder and takes longer). You have to invest well before your growth starts to sputter, because it takes time and multiple touchpoints to build awareness and “lay the groundwork” for new audiences and product lines.
Brand-led growth implies an always-on brand strategy that starts early and informs the development of every channel, so the story (who you’re for today, and who you’re building for long-term) unfolds over time and isn’t limiting.
Apple’s decision to go hard on advertising their commitment to privacy is a perfect example of brand-led growth. Is it really the top criteria driving phone selection? Probably not, but they recognized a societal trend (concern about digital privacy) and strategically addressed customers’ concerns before they could block growth. Aligning their brand with “privacy,” before any privacy-related issue has arisen, means they don’t have to react, and instead are a safe haven.
Brex launched as “the corporate card for startups,” but within its first year shifted to “the card for growing companies” and then to “the financial operating system for growing companies.” Even though they weren’t explicitly going upmarket at the time, that shift in storytelling gave them leeway when they hard-pivoted into enterprise SaaS. (You may recall the news about Brex offboarding SMBs—while it was briefly confusing, it wasn’t shocking or “off-brand” given previous messaging.)
Notion, PLG darling, is enjoying the tailwinds of its early brand investments, particularly by fostering a community of evangelists who love the product. That’s a fantastic example of how proactive and early brand investments have supported growth. However, while Notion has actively targeted startups and teams for some time, the question remains—in their extremely commodified space (which is just as commodified at the top of the market as where they operate now), how fast will they be able to gain enterprise market share before their valuation takes a hit?
Compared to Brex, they weren’t as proactive about signaling toward enterprise early. While their design-led brand has obvious strengths and differentiation, is it resonating with enterprise executives? Some perceptions they might face: “This won’t scale for us” or “Oh, this is a cool tool, but it’s for ‘creatives’ or it’s for smaller teams.” It takes a long-term, intentional process to change these perceptions.
While PLG can be highly effective, relying solely on it carries significant risks:
Limited awareness outside the core user base
Students might attract more students to use Notion, but they won’t attract enterprise decision-makers.
Difficulty displacing more visible or entrenched competitors when expanding into new markets
Superhuman has a cult-like following, but taking market share from Outlook is an uphill battle.
Missed opportunities to shape broader market perceptions
Competitors like Google Drive, Microsoft OneDrive, and Box now dominate Dropbox’s market despite its early advantages.
Potential for the brand to be defined by competitors
Calendly’s brand is so feature-oriented that it risks them being cast as generic or replaceable—as evidenced by Google’s recent appointment scheduling launch.
There are plenty of examples of companies on the brink:
HBR credits the PLG Trap for Dropbox’s growth decline: “Dropbox has seen steadily declining year-over-year revenue growth from 25% in 2018 to only 8% in 2023 due to a failure to make this transition [to sales-led growth]”—though I’d add that sales is only one factor. Brand-market fit has been their greater struggle.
Zoom, Superhuman, Discord, Airtable, and Calendly: All gained traction through ease of use, customizability and personalization, and shareability. Market pressures now see all of the above aiming upmarket or toward expansion and leaning reactively into brand marketing motions. How long can PLG sustain their current rate of growth? When will it be too late?
These companies share a common thread: their brands are built on the reputation of product functionality (rather than emotional resonance) and their growth has come largely through word-of-mouth and referral among consumer audiences. This approach has its advantages:
Authenticity: The brand emerges organically from the product’s strengths.
Cost-effectiveness: Word-of-mouth and built-in viral loops reduce the need for awareness investment.
User loyalty: Satisfied customers often become advocates, perpetuating growth.
But these companies are all facing intense functionality competition in commodified spaces, and have not invested in the brand differentiation that could fuel their GTM into new (enterprise) markets, or keep users from trying a cheaper but equally functional competitor. The company must keep growing, but ROI on PLG and demand channel spend has fallen. Attracting a new buyer persona or outcompeting an entrenched rival requires more than a great product—it requires standing out. Brand = differentiation!
Picking up on Notion again: Notion was in this situation when I was hired to lead their global brand and campaigns team—the company had seen tremendous growth by creating viral loops that encouraged users to share their customized pages and workspaces with others. When I joined, the remit was to accelerate growth into audiences with higher revenue potential, especially corporate teams. While PLG flywheels still hummed in the background, we needed brand marketing to create awareness among audiences who were less familiar with the product, either in general or specifically as a professional tool with all the credibility and stability they’d need to trust us with critical day-to-day work.
How about Superhuman? They recently announced new features tailored to the needs of corporate teams (and that sweet upmarket spend), a natural but significant shift from their original “invite only” exclusivity model. While PLG can still support this motion as people with work emails refer their colleagues, they’ll need brand marketing to quickly shift perception and gain awareness among the financial and IT decision-makers who are the actual buyers for “Superhuman for Teams,” let alone “Superhuman for Enterprise.” This group has completely different motivations from the prosumers who first loved and evangelized their product, and are likely comfortable with their current provider (usually GOOG or MSFT). They will need brand marketing to turn inertia (it’s not a hair-on-fire problem) into awareness and ultimately action.
The risk of waiting too long
It’s an adage in tech that your first product gets you in the game, but your second (and nth) product gets you to the moon (or NYSE). PLG often works well for that first product, but it’s very rare for companies with weak or unintentional brands to successfully launch and grow multiple product lines, or expand them to multiple audiences (especially demanding enterprise audiences).
And if you want to cross the chasm to a new market, you cannot rely on PLG. This is a key reason why so many promising, well-funded startups fade and eventually flounder and a key lesson for founders to learn early—well before they necessarily need dedicated awareness and brand marketing spend.
How to leverage brand marketing in PLG
What happens when your top of funnel growth slows and ROI of demand channels falls? What happens when your new target customer thinks your product is for someone else (because it was for so long)?
If you’re subscribed to this newsletter, you know that brand marketing shouldn’t be considered the “fun budget”—money set aside for when the founder wants a vanity billboard or TV ad. 🤡
Brand marketing (further defined here) is a proactive, focused effort aimed at promoting your brand’s identity and values to a wider audience to lay the groundwork for future consideration and purchase. It is the foundation for efficient growth marketing, priming your audience (future upmarket customers especially) for a purchase that may be a long way off—in B2B, only ~5% of your audience is in market considering a purchase at any given time.
The transition to more active brand marketing doesn’t mean abandoning the principles that drove initial success. Instead, it’s about amplifying the brand’s strengths to a wider audience by:
Translating product strengths into messages that speak to broader or new target audience segments.
Balancing increased visibility with maintaining a sense of exclusivity or “insider” appeal.
Ensuring that demand marketing efforts align with and enhance the existing brand identity.
Be proactive, not reactive
While a great product experience and a well-tuned referrals motion obviously contribute to growth, be prepared to pivot towards more strategic brand marketing before the time comes to expand. The most successful companies are the ones that square daily growth activities with a long-term vision, the ones who act proactively and decisively to evolve their brand strategy. The more proactive you can be, the better your growth advantage (and the more fun you can have with it). 🫐
My 4-week course on Maven, Brand for Growth-Stage Leaders, includes a tactical deep-dive into this exact challenge—how and when we scaled brand marketing globally at Notion. The 5th cohort, starting September 2, is now open. You can enroll now or join the waitlist for updates.
Do you work for a PLG company? When did you start the conversation about brand?
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