The growth model decision: PLG, sales-led, or hybrid

The growth model is the structural decision that determines everything downstream: which channels will be effective, what your CAC economics look like, what your north star metric should be, and how your product needs to behave. Getting this wrong and then optimising hard in the wrong direction is the most expensive mistake in B2B growth.

The three primary models:

Product-led growth (PLG) means the product itself is the acquisition, activation, and conversion mechanism. Users try before they buy; value is experienced, not sold. Slack, Figma, and Notion are canonical examples. PLG requires a product that delivers meaningful value quickly on a free or trial basis, a user who can adopt without IT sign-off or committee approval, and a viral or social loop (your product is seen by other potential users through normal use). The north star in PLG is typically an activated user or a habit metric (daily active users, files shared, seats activated). PLG compresses CAC dramatically when it works because the product does the selling. OpenView's 2023 Product Benchmarks report found that PLG companies grow 2x faster than the median SaaS company, but only 15% of "PLG" companies have the product economics to actually sustain the model.

Sales-led growth (SLG) means human-guided sales conversations create and close deals. The product may or may not be available before the sale. Enterprise, complex, or regulated products with long buying committees almost always land here. CAC is higher, deal sizes are larger, and the model tolerates lower volume. NRR and expansion are the primary compounding mechanisms because each renewed and expanded account amortises the original CAC.

Hybrid (sometimes called product-led sales or PLS) uses a free or trial product to generate initial users and intent signals, then converts those signals into sales conversations for the commercial tier. This is the most common model for B2B founders serving mid-market or enterprise segments with a product that can generate individual user value. HubSpot's self-serve to sales handoff is the canonical example.

When to switch models

Model switches are expensive and disruptive, but sometimes the evidence demands one. Indicators that a switch is warranted:

• In PLG: if your free-to-paid conversion rate is below 2% after 90 days (OpenView benchmark: median PLG conversion is 2.5–5%), and the activated cohorts do not show a habit loop forming, the product is not earning its acquisition role.
• In SLG: if average deal size is falling below £15,000 ACV and sales cycle is lengthening, the market is self-selecting toward a motion the product can serve without a human, and PLG elements should be explored.
• In hybrid: if product-qualified leads (PQLs) are not converting at a higher rate than marketing-qualified leads (MQLs), the signal from product usage is not clean enough to be useful, and the motion reverts to traditional SLG.

The Choose Your Growth Model playbook walks through the full decision framework with a structured lens for your specific motion and market. For the AI-first operator, an agent can monitor the conversion and usage metrics that signal a model mismatch, and surface the case for a switch before the data becomes impossible to ignore.