I’ve worked with enough PLG (Product-led growth) companies at this point that I’m starting to think we all work at the same company. Different logo, different Slack, slightly different shade of purple or gold on the pricing page, but somehow the exact same conversations.
Watching companies go through the same PLG-to-enterprise growing pains over and over again makes me feel like I’m Bill Murray in Groundhog Day. I’m not really seeing this at Lovable and I will do everything in my power so that it will continue this way, but as I talk to other companies, it is always a painful reminder how wide-spread this is…
So this post isn’t really about the solutions. Okay, yeah, obviously I have strong opinions about how we can fix some of this stuff. But for now sometimes it’s helpful to just realize you’re not the only one having these discussions. The good news for you is… your problems aren’t so unique. Not such great news for our industry, though.
So I made a bingo card of my um, favorite conversations.
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‘Why do we need 10,000 $10 customers when we could get one $100K customer?’
This is the original sin.
At some point (usually after the first few big enterprise deals close) someone does this math. And I admit that the math checks out. One customer paying one hundred thousand dollars is indeed the same amount of money as one thousand customers paying one hundred dollars. We have Excel. We have confirmed it.
The problem is that those two revenue streams don’t have the same acquisition motion. If our enterprise business grew out of our PLG base, that $100K customer may have started as a $25 self-serve customer. Someone discovered the product, started using it, invited their team, usage spread through the company, and eventually the account got to be large enough that security, procurement, IT, or Sales got involved. The $100K contract is the final result of a much larger system underneath.
But big ACVs are hard to resist. Especially once someone puts them in the board deck. And that’s when the conversation turns into: why are we spending all this time optimizing self-serve when Enterprise is clearly the bigger opportunity? Let’s hire enterprise sellers. Let’s build an outbound motion. Let’s move the roadmap upmarket. Let’s focus Marketing on executives. Look at how much more efficient this will be.
Except that means changing literally the entire acquisition model. That’s going from capturing enterprise demand generated by your product to trying to somehow generate enterprise demand from scratch. Those are not the same motions. They require different channels, different talent, and different economics. And a massive new marketing and sales budget.
And while everyone is busy building the shiny new enterprise machine, the PLG engine is dying a slow, sad death. Acquisition slows. Activation gets worse. Fewer teams adopt. Fewer accounts naturally expand into those beautiful $100K contracts. Then, a year later, everyone gets together to figure out why enterprise pipeline is drying up.
‘Let’s count every self-serve signup as a lead!’
‘Hm, pipeline is slow? Well, PLG has lots of signups. Therefore, signups = leads. Look at us aligning our go-to-market motions!’
‘Great, now let’s call everyone 10 minutes after they sign up.’
Nothing says ‘product-led’ like signing up for a product, clicking around for 7 minutes, and immediately getting a phone call from Gary asking about your enterprise budget.
But why stop there? Let’s put a mandatory sales form directly into onboarding: Company size. Role. Phone number. What are you hoping to accomplish? Would you like to talk to Sales? Please tell us your annual budget before we allow you to discover whether our product even works.
This works in the short term, since your ‘lead’ volume will explode. But… wait a minute?? Why are all these leads converting so poorly!?
‘These product leads are garbage.’
Yes. Correct.
We decided to call everyone a lead.
We took people who were trying to use the product, interrupted them before they experienced any value, collected their contact information, routed them to Sales, and then discovered that many of them weren’t interested in talking to Sales.
This should not have been a surprising research finding.
You can’t ambush users and try to force/trick them into taking sales demos and call it product-led sales. A good PLS motion uses product behavior to identify when an account is developing a problem that Sales can actually help solve. Watch for things like team adoption, usage expansion, governance needs, plan limits, multiple departments showing up, and whatever signals actually correlate with an enterprise opportunity in your business.
Otherwise it’s just harassing people. Plus the added side-benefit that these people may be our most loyal community members and power-users, who were huge advocates for us… until they started getting bombarded. Whoops!
‘We’re losing sales deals to self-serve.’
This is always my favorite because you have to admire the mental gymnastics it takes to call this a loss. We acquired a customer… they liked our product enough to pay us… and they chose the buying experience they preferred. The only problem is that they didn’t talk to the human we wanted them to talk to, so somehow we have decided this is bad news.
I know why this happens. Sales teams have quotas, companies have targets, and somewhere there is a very beautiful forecast with a very specific number in a very specific cell. But the customer does not give a shit about our org chart. If they can solve their problem with self-serve today, let them. Maybe they expand tomorrow. Maybe they need enterprise 6 months from now. Maybe they never do. The goal is to let customers transact in the way that makes sense for them, not force them into the channel that makes our internal attribution model look nicest.
And once we start competing internally over who gets credit for revenue, things get weird very quickly. We’re no longer competing with our competitors. We’re competing with ourselves. Amazing strategy.
‘Let’s move this self-serve account to Enterprise.’
If you can’t beat ‘em, make ‘em join you, right?
Nothing actually changes for the customer - same product, same usage, same people, same revenue. But that doesn’t help us hit our enterprise revenue growth goals, now does it?
So we take $50K of self-serve revenue, move it into the Enterprise column, and congratulations, Enterprise grew by $50K. We did not acquire a new customer. We did not expand the customer. We did not create $1 of incremental revenue. We just copy-pasted a number into a different column on the revenue spreadsheet and now we’re all getting bonuses!
Unfortunately, we may have actually made the revenue less valuable. The customer who previously self-served now gets a salesperson, a CSM, higher-touch support, contracting, account management, and a bunch of other enterprise services that aren’t cheap to deliver. We successfully took revenue we already had and made it more expensive.
This is usually an incentives problem. If Sales gets quota credit for moving existing self-serve revenue into Enterprise, you should expect Sales to get extremely talented at moving self-serve revenue into Enterprise. People tend to get very good at the thing you pay them to do.
One simple way to avoid this is an ARPA multiplier for channel changes. If a $10K self-serve account converts to a sales-owned account, that’s not a $10K Enterprise win. Just create a policy that requires an account to become much larger (like, 2x or 3x its existing ARPA) before the migration gets treated as successful sales expansion. You should pick the multiplier based on your own economics, but you need to create incremental value rather than just reclassifying existing value.
Otherwise you’re measuring revenue migration, not enterprise growth.
‘Can we move this feature from self-serve to enterprise? It will help us close more deals.’
Y’know what’s even better than moving happy self-serve customers over to enterprise plans? Stripping happy self-serve customers of their core features to ‘encourage’ them to buy a higher tier plan.
This one is especially fun when the feature already exists. Like, customers are already using it. It may even be one of the reasons they love the product. But now we’ve discovered that it could help Sales close deals, so naturally the solution is to take it away.
The logic sounds something like: enterprise needs stronger differentiation, this is a valuable feature, so moving it upmarket gives Sales something to sell. Except that this is removing value, not creating it.
There are absolutely features that belong in enterprise. But your default instinct should be to push product value down, not constantly pull it up. The goal for packaging is not to make self-serve shitty enough that Enterprise finally looks compelling.
‘Let’s have all new features go into Enterprise plan. Enterprise needs more differentiation.’
This is the more sophisticated version of the same idea. Instead of debating individual features, we’ve created a policy: innovation belongs to Enterprise unless proven otherwise.
Which is a fascinating strategy for a company whose growth was built on people being able to discover, try, adopt, and fall in love with the product without talking to anyone.
Enterprise differentiation should come from solving enterprise problems, not simply getting first dibs on everything Product builds. Otherwise your self-serve product slowly becomes a museum of everything you built 2 years ago, while all new value gets locked upstairs.
And then 6 quarters later, someone will of course ask why self-serve growth has slowed down.
We should probably launch an investigation.
‘You have to build this. I already sold it to the customer.’
I love this version of roadmap planning.
Yeah, of course Sales should be bringing customer needs into Product - they’re on the front lines and have tons of context about what customers want, what’s blocking deals, and where the product is struggling.
But ‘customers keep asking for this’ and ‘I promised this to a customer and told them it would ship in Q3’ are not the same thing. That’s moving from a mutual conversation to a hostage situation.
And the opportunity cost is almost impossible to see. The team is all clapping for the $300K deal marching its way through the Salesforce dashboard, but it’s impossible to see all the thousands of future customers who won’t activate, retain, or expand because Product spent the quarter building something that one enterprise prospect ‘needed.’ Actually, no one will ever see those customers at all, because they’ll never sign up.
‘You can’t ship that!’
Yep, opposite side of the same coin. Build the stuff my clients say they need, but also for the love of all that is good, please do not release new capabilities that would disrupt the sales cycle. Or without giving enterprises clients 3 month notice( nothing screams innovation more like 3 month notice).
This may include but is not limited to:
New features that the sales team has not yet received enablement training on
New functionality that improves efficiency and might change the original value prop
New navigation, which could possibly require new customer education materials, client exec buy-in, and an entirely renegotiated MSA and SOW.
This is how a team that was once famous for shipping super fast and resolving customer concerns within days becomes an org that for some reason can’t even patch their own bugs without 7 layers of approval and 3 month notice period.
How’d you do?
Maybe checking off all those Bingo boxes doesn’t really feel like winning, but at least you know you’re not the only one playing. Do share in the comments if you have any ‘must do’ ways of solving these ‘problems’.
Edited by Jonathan Yagel.
I said AMEN in my head so many times, and I am not religious. Thank you for this!