Product-Led Growth (PLG) 2.0: The 'IN' Thing

About seven years ago, I was sitting in an interview at UBS, feeling pretty good after pitching my product proposal, until the interviewer hit me with some brutal honesty. He told me my ideas were... well, primitive for the topic at hand. I was furious at first but deep down, I knew he was right. If I wanted to make it as a innovative and results-proven product manager, I had to stop thinking inside the box and start keeping up with the world outside it.

So here we are. This article is a little open letter to every product manager and aspiring PM out there; a sharing about something we don’t talk about nearly enough but is absolutely critical for our growth... the need to keep evolving. This is just a small piece of what I actually consult, research and direct as a product management consultant. If you want to discuss or learn more, do feel free to connect with me via my "Life" page. Now back to the article.

Today, with technology, information, and customer interactions being more accessible, the barriers to entry across industries are falling fast. If you think product management skills five or ten years ago will cut it now, they won’t. Just like products need upgrades, so do we.

Product-Led Growth (PLG) has totally changed how software companies go to market. In a PLG model, the product itself handles customer acquisition, conversion, and expansion. This shift was first shown by pioneers like Atlassian and Slack back in the 2010s while I was still serving my military. The "PLG 1.0" phase proved that if you build a great, self-serve product, users will flock to it and amazingly you won't need a huge sales team beacause it will sell itself.

But as PLG matured, cracks started showing with low free-to-paid conversion rates, growth hitting a ceiling after the early wins, and products struggling to handle bigger, more complex enterprise needs. That's where "PLG 2.0" kicked in. A smarter version of the original idea that mixes in data-driven optimisation, hybrid sales models, and a bigger focus on retention and expansion.

Throughout my consultation work, even while I was in the bank, I noticed how many industries were still sticking to the PLG 1.0 model or seemed like in PLG 2.0 while operating in PLG 1.0 methods ( I usually categorise them as PLG 1.5- neither here nor there). Hence, I thought it would be critical to share some of the differences between the 1.0 and 2.0 models and why 2.0 is advent in today's landscape regardless of the company model.

In this report, we’ll break down PLG 1.0 vs. PLG 2.0, dive into what makes PLG 2.0 tick, and walk through case studies across B2B and B2C (beyond the usual Figma and Notion examples). We'll also look at the challenges companies face moving into PLG 2.0 and take a peek into what a future PLG 3.0 could look like. My insights pull from the latest research and thought leadership between 2021 and 2025.

"Build It and Pray" to "Build It and Actually Plan"

Back in the good old days of PLG 1.0, companies conceptualised based on great products and gambled on the notion that users will fall in love unconditionally hence pouring money at the organisation. So many of they rolled out freemium plans and free trials, hoping people would try it, get hooked, and eventually pay up. Bottom-up adoption was the name of the game with small teams grabbing free tools, loving them, sharing them, and before you knew it, boom, an upgrade and they all lived happily ever after.

But lt's get real. A lot of companies basically duct-taped a free trial onto their existing products without rethinking onboarding or user experience. Only an average of 5% of freemium users actually converted to paid plans. Not that happily ever after I guess. Before 2020s, some desperate teams even tried cold-calling every single signup to convince them to onboard with their packages, a heroic but wildly inefficient plan when you’re fishing with a net full of holes.

Fast forward to today and PLG 2.0 has entered this game. Companies finally realized that the product can't do all the heavy lifting alone. Now it’s about intentional growth where mixing product magic with data wizardry, smart marketing, and a little help from the sales squad gets the product the needed attention and margins.

Buyers today expect hands-on experience and instant gratification. So PLG 2.0 doesn’t just throw out a free trial and hope for the best. It builds PLG-friendly products from the ground up; packing with demos, videos, interactive tours. Basically, its about a product so easy and engaging, it practically sells itself before anyone clicks "sign up."

The modern PLG playbook would thus be to nail the website, streamline onboarding, keep users engaged, and when high-potential users show up, tap in a sales team who knows exactly when and how to help, powered by real usage data. This hybrid model, called Product-Led Sales (PLS), has become the new backbone of PLG 2.0.

Well, the reality is that companies that moved toward PLS during the first PLG wave saw significant jumps in revenue and valuation. Turns out, when you mix viral product love with smart sales ops, good things happen.

Here’s how the two eras stack up:

Aspect	PLG 1.0	PLG 2.0
Primary Focus	Build it, pray for viral magic.	Build it, optimize it, track it, and amplify it with smart marketing and sales.
Approach to Free Users	Cast a huge net with freemium/trials; ~5% conversion.	Create a smarter, higher-quality funnel with personalized onboarding to boost conversions.
Go-to-Market Alignment	Mostly product-led, sales was an afterthought.	Full squad effort: product, marketing, data, and sales working together like a championship team.
Monetization Model	Tiered/seat pricing, free tier as bait.	Usage-based or hybrid pricing models that match value delivered.
Key Metrics	Signups, activation, free-to-paid conversions.	Plus product-qualified leads/accounts, retention rates, expansion revenue, and engagement health.
Notable Challenges	Keeping growth alive post-virality, scaling monetization, reaching enterprises.	Marrying self-serve with enterprise needs without losing efficiency or personalization.

Credit to ChatGpt for consoliating all my pointers in an excel and to provide the above table.

So in short, PLG 2.0 is like PLG 1.0 but all grown up, wearing a tailored suit, carrying a data dashboard, and knowing that trust (and not blind hope) wins customers today. Instead of just building a great product, companies now market it better, onboard smarter, and sell when it actually makes sense.

PLG 2.0: The Whole Package

1. Freemium and Fast Onboarding

"Show users the magic early." Companies double down on the idea of providing value upfront with rich freemium models or full-blown free tiers, not just stingy 7-day demos. From my experience, the secret is to get users hooked before even thinking about asking for money.

This is backed by lightning-fast onboarding. Personalised tutorials, checklists, pop-up tips are everything to get users to their "aha moment" instantly. PLG 2.0 firms treat activation like a science experiment with constant A/B tests, in-app messaging tweaks, and onboarding flows designed to improve conversion metrics.

The product itself is the teacher now with in-app tooltips, resource centers, and follow-up emails making sure users actually know what they’re doing. The faster users see value, the faster they stick and spend.

2. Its all about Data and Personality

If PLG 1.0 tracked basic stuff like signups and clicks, PLG 2.0 runs full-blown surveillance without seeming like a North Korean regime. Companies now dive deep to undersand where users get stuck, what features they love, when they’re likely to leave. Basically, the devil is in the details and nothing escapes the radar.

Teams live inside a "build-measure-learn" loop, tweaking products based on real behaviour. If data shows users who complete Action X on Day 1 have double the 7-day retention rate, everyone’s getting nudged toward Action X.

And it’s not just passive tracking. AI now personalizes the whole experience. Products adapt in real-time with tutorials, suggestions, even dashboards that change based on what you’re doing. Some products even have AI copilots that pop up with "Hey, you might like this feature" vibes ( though it gets annoying when it's repetitive).

Companies define product-qualified leads (PQLs) based on user behaviour, eliminating all the guessing and assumptions. Usage signals feed straight into CRMs, scoring leads automatically and giving sales teams crystal-clear targets. In PLG 2.0, it’s data or die.

3. Hybrid Product-Led Sales (PLS) Motions

In PLG 1.0, sales teams were like forgotten side characters; maybe showing up after someone upgraded. PLG 2.0 changes the game with a hybrid approach called Product-Led Sales (PLS). Now, the product does the early heavy lifting, and sales jumps in when it actually matters.

Picture a team hits 5 active users and shows serious traction. Ding! A sales rep gets alerted and reaches out, not with a cold pitch, but with a "Hey, let’s help you scale this thing" approach. These aren't hard sells. They’re warm assists based on real usage.

Even the PLG poster children are doing it by hiring sales teams to lock down bigger enterprise deals, while still keeping self-serve trials alive. Its sales upgraded to be data-driven, helpful, and perfectly timed.

HubSpot’s freemium coupled with their sales-assist model nailed this. They built up a massive free user base, then let sales prioritise only the hottest, most active leads which led to crazy efficient growth in the initial strategies

4. Community and Virality at Scale

Word-of-mouth worked in PLG 1.0, but in PLG 2.0, companies are turning it into a science. Now, they’re building massive user communities, referral programs, and in-product viral loops to spread the product like wildfire.

Every time someone sent a meeting link in Calendly, another person got exposed to the product. Pure viral genius. Linktree creators passed it around like free candy, growing the user base without spending a fortune on ads.

Modern PLG companies design products that want to be shared and invite flows, referral bonuses, social sharing etc. Some even build full-blown ambassador programs or creator platforms (think Klarna) to amplify the brand.

Communities aren't just for marketing either. The users give feedback, suggest features, and help the product evolve faster. It's like having a giant, unpaid R&D department made of superfans.

5. Flexible Monetization Aligned with Customer Value

PLG 2.0 also tears up the old playbook on pricing. Forget rigid subscriptions and focus on flexibility.Usage-based pricing (UBP) has exploded and by 2022, 61% of SaaS companies had adopted some form of it. Instead of charging per seat, now users pay for what they actually use - per API call, GB stored, messages sent, etc. This created a variable cost for many users that was like a buffet where you only pay for what you eat.

Credit to Snowflake and Twilio who perfected this. Users start small with minimal commitment, and as they find value, their usage (and the bill) scales naturally. No heavy sales pitches needed.

PLG 2.0 companies often blend UBP with tiered models with a starter plan with basic limits and extra charges as you scale. It’s fair, transparent, and users love it because they feel like they’re paying exactly for the value they get.

Metering, billing, and communicating usage sounds messy and it is but the payoff is massive. Flexible pricing aligns customer success with company success. When users win, the company wins too.Flexible, pay-as-you-grow pricing is the future while rigid subscriptions are being replaced by usage-based models that scale with customer needs.

Use Case-Studies of PLG 2.0

To see PLG 2.0 in real life let's take a look at companies across B2B, B2C, and B2B2C who pulled it off without pulling the plug.

HubSpot: From Hardcore Sales to Freemium Superstar

HubSpot wasn’t always PLG cool. They started as a classic sales-led company. But in the late 2010s, they launched a free CRM with tools like email and forms. An decision that led to hundreds of thousands of new users, with about 15% converting to paid. Instead of firing their sales team, they just got smarter and got their representatives to focus on upselling engaged users. They also built an app marketplace to make their platform stickier. By 2023, HubSpot became the go-to platform for scaling companies, with freemium fueling cheaper, faster growth.

Atlassian: Selling Without a Sales Team

Atlassian (makers of Jira and Confluence) basically hit hundreds of millions in revenue before hiring any real salespeople. Users could just download the software, get hooked, and upgrade at their own pace. Over time, Atlassian added enterprise tiers, a marketplace, and customer success roles — proving even the most hardcore self-serve companies eventually layer in some human help. No hard selling though — just smooth hand-holding when big customers need it.

Freshworks: Treating PLG Like an R&D Project

Freshworks doubled down on "PLG 2.0" by seriously optimising onboarding and in-product nudges. After users signed up, the product basically babysat them through setup and pushed useful features over the first 30 days. With 45% of their new ARR coming from self-serve channels, they saw this approach drive faster, more predictable growth. Freshworks treats PLG like a science experiment with metrics, experiments, funnels making it the whole lab coat experience.

Klarna: Checkout UX as a Growth Machine

Klarna isn’t traditional SaaS, but it sure nailed PLG principles. They made online payments ridiculously smooth (think one-click, no hidden fees) and let the product sell itself. Over 150 million users later, Klarna kept growing through partnerships with big brands like Nike and H&M, with a clever influencer community. They even used machine learning to spot where users were dropping off, fine-tuning the checkout experience to boost merchant conversion rates. Textbook PLG 2.0, just in fintech form with automation.

Grammarly: Fixing Typos to Building Empires

Grammarly started by giving away a free grammar checker that immediately showed users how much better their writing could be ( though I never use it for the writing of my blogs). This hands-on value built a 30-million-plus daily user base. Over time, they added upsells like advanced checks, premium plans, and eventually, enterprise packages especially once companies noticed half their staff already using the free version. Grammarly even gamified it a little, sending users weekly writing reports that subtly nudged them toward upgrading.

Duolingo: Gamifying Language Learning

Duolingo turned learning Language leaning into a daily game. Free to start, addictive to continue. Points, streaks, leaderboards - it had it all. The app pulled in hundreds of millions of users with little to no major marketing spend. Revenue came later via subscriptions that removed ads or unlocked extras. Additionally, they built strong community features where users could chat, contribute to course creation, and generally spread Duolingo like wildfire.

The lesson

First, make it dead simple for users to try your product, ideally for free, no strings attached. Second, make sure the product isn’t just good. It needs to be so awesome and easy to share that users can’t help but spread the word themselves.

Next, use actual data to guide how users experience and interact with the product. You add human touch-points carefully, only when they make a real difference, like smoothing out a big deal or removing a final hurdle.

Finally, when it’s time to monetise, you do it flexibly by letting customers scale their spending naturally as they find more value. No hard locks, no bait-and-switch.

Done right, PLG 2.0 isn’t just about pulling people through the door. It’s about keeping them excited, helping them grow with you, and turning your everyday users into your loudest, proudest fans.

Challenges in Implementing PLG 2.0

Going product-led sounds great on paper, but let’s be real. It's no magic wand. Companies diving into PLG 2.0 face a bunch of tricky challenges along the way.

1. Free Users Aren't Forever

A classic PLG heartbreak story would be having tons of free users show up... then stall. Early adopters upgrade fast, but after that.... it's just cricket noises. Welcome to the “PLG Trap,” where growth plateaus and free users either churn or camp forever without paying.You can only add so many shiny new features before the magic wears off. Winning here means having a long-term game plan and constantly expand what users can do; create new reasons to stay, and find new audiences before the old ones dry up.

2. Cultural Shifts: Herding Cats Across Teams

PLG isn’t just a strategy. It’s a full cultural overhaul. Traditional companies used to sales quotas and cold leads can find it tough to pivot. If product, marketing, and sales teams don’t play nice together by chasing activation, retention, and user love instead of just revenue, PLG falls flat. Small startups can shift fast. For big companies, it’s like turning a cargo ship. Expect internal resistance with the notion and fear that freemium will kill revenue. Sales teams being worried about being replaced by in-app nudges, and a lot of "but we've always done it this way." would not make it an easy journey of adoption.Winning requires leadership buy-in, retraining teams, and tying bonuses to real product adoption.

3. Complex Products Don't Always "Self-Serve" Nicely

Not every product was built for casual free trials. If your tool needs a six-month deployment plan and a team of consultants to get started, PLG alone won't save you.

Enterprise-grade, complex products, like heavy-duty cybersecurity platforms, usually need a helping hand. Some companies get creative by offering sandboxes, free tools for a slice of the experience, or hybrid approaches where product-led generates leads but sales closes the deal. My suggestion is for you to know if your product can really self-serve. If not, don't force it. Blend it smartly.

4. Wasting Money Chasing Free Users

Surprise: not all PLG companies are lean, mean growth machines. Some actually burn more cash than their sales-led peers without better results. It happens when companies pour engineering hours into free user features or run endless growth hacks that don’t move the revenue needle. Top PLG players spend smart: about 10% more on R&D and marketing, but they also pull way better growth and valuations. In my opinion, focus on user quality, not just quantity. Measure everything ruthlessly and if it doesn't drive conversion, retention, or upsells, kill it.

5. Market Squeeze: When Everyone’s Offering “Free”

With budgets tighter in 2025/2026, businesses are being pickier about new tools. Viral spread slows down, users scrutinize ROI harder, and CFOs start axing "nice-to-have" apps like there’s no tomorrow. Everyone expects a free trial but when every product is free to start, standing out gets harder. Efficiency and profitability matter more than ever. It's all about smart, sustainable scaling without alienating users by pushing upsells too aggressively.

6. Security and Governance Roadblocks

Nothing kills viral product love like an IT team slapping a ban on it. In enterprise deals, products have to clear serious compliance checklists with single sign-on, encryption, audit logs, the whole nine yards.Many startups get caught unprepared here. They move fast and break things... and then find out enterprises need security certifications before signing contracts. Trust me, I have dealt with this more than one can imagine.PLG 2.0 companies are learning to land bigger deals, while security and governance aren't optional extras .

Conclusion

Going PLG 2.0 isn’t just about launching a free trial and hoping for the best. It’s about long-term thinking, smart resource allocation, aligning your entire team around users, and being ready to mix in sales when needed. Companies that stay flexible by blending product-led tactics with sharp sales , obsessing over unit economics, and actually listening to users are the ones who survive the rough patches and come out winning.

PLG 3.0: The Future

While nobody has a crystal ball, the next evolution of product-led growth (let's call it PLG 3.0) is already taking shape. Here’s where things might be headed:

AI-Powered Growth Ecosystems: Your Product, Now Smarter Than You

If PLG 2.0 was about using data smartly, PLG 3.0 is about letting AI run wild. Imagine AI handling onboarding, support, experiments. It's basically everything except making coffee. New users get personalized setups without lifting a finger, struggling users get proactive help, and growth teams have AI copilots spotting patterns and running tests faster than humans ever could. In PLG 3.0, the product doesn't just respond but it anticipates what users need; making the whole experience "seamless, intuitive, and genuinely delightful."

Deeper Human-Product Synergy: Users as Co-Sellers

Even with robots doing half the work, humans still matter. PLG 3.0 could see products embedding community directly into the experience but think built-in forums, AI-matched peer mentors, and user ambassadors joining sales calls to vouch for you. Your best users might become your best salespeople, paid in swag, clout, or rewards. Growth becomes decentralized with users, partners, and AI all working together to spread the love.

Enterprise Gets a PLG Makeover: Hybrid 2.0

Right now, PLG and enterprise sales kind of awkwardly dance around each other. PLG 3.0 could smash the wall down completely. Big companies will expect to "try before they buy," even for million-dollar software. AI will spot hot accounts before sales ever makes a call, and pricing could shift toward pay-as-you-grow or outcome-based models. Sales teams won’t disappear. They’ll just show up way later, more like closing DJs than opening acts.

Platform Plays and Modular Growth

Single products are cool, but platforms are cooler. PLG 3.0 companies will master the art of starting with one app and cross-selling the rest and all inside the product itself.

Users unlock new tools as they need them, without endless sales calls. Think ecosystems, not one-trick ponies. Expect modular product bundles, dynamic recommendations, and "app stores within apps" becoming the new norm.

The Product Is the Brand

In PLG 3.0, websites might be the product; offering live sandboxes, interactive demos, and AI-guided tours without a single "contact sales" button in sight. If a product can’t sell itself in two clicks or less, it’s getting left behind.

Conclusion

PLG 3.0 will be smarter, faster, and way more integrated. AI will fine-tune everything, users will help sell, and companies will focus on making products that practically grow themselves.

Of course, it won't all be rainbows. Expect new challenges around privacy, trust, and keeping the human touch in an increasingly automated world. Companies that balance automation with empathy (and keep users at the center) will lead the next wave.

If PLG 1.0 was about proving the product could drive growth, and PLG 2.0 was about scaling it efficiently, then PLG 3.0 will be about orchestrating growth so smoothly, it almost feels like magic.

The Wrap Up

Product-Led Growth has gone from being a niche tactic to becoming the way smart companies grow. PLG 2.0 is today’s version where great products don’t just attract users. They’re backed by data, smart teams, and strategies that make growth sustainable and not just a lucky viral moment. It's not just about getting users in the door anymore, it’s about guiding them through the whole customer journey from "trying it" to "loving it" to "paying for it... happily ever after." Deliver real value upfront, optimize everything with data, bring in sales when it makes sense, build buzzing communities, and use flexible, friendly pricing models.

But PLG 2.0 isn’t an instant win button. Companies still wrestle with free-user plateaus, internal politics and the hard reality that markets are getting stingier. The ones that crush it are those who find the balance between free vs. paid, self-serve vs. personal touch, automation vs. real human support. They listen to users, they iterate non-stop, and they rally the whole company behind the product-led mindset.

Finally, PLG 3.0 is gearing up by bringing AI, smarter communities, and even more seamless growth strategies where the product pretty much sells itself (while you're still sipping your coffee). Through all the evolution, 1.0, 2.0, 3.0, one truth stays rock solid - The winners will always be those who put user value and experience front and center. Tools and tactics will change. It’s here to stay.

Note: These are just opinions from my personal research narrated in the form that my mind speaks to myself everyday ( don't worry, I am not insane.. yet). They are backed by statistics that I have attained as part of my consultation work and experience in the Finance industry. No hard feelings or offence to anyone hor!