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The ultimate guide to adding a PLG motion | Hila Qu (Reforge, GitLab)

The ultimate guide to adding a PLG motion | Hila Qu (Reforge, GitLab)

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Hila Qu is an Executive in Residence at Reforge as well as a renowned growth advisor, angel investor, and published author (her book about growth was named one of the top 10 business books of 2018 in China). Previously, she served as the Director of Growth at GitLab, where she implemented and scaled their PLG motion, and VP of Growth at Acorns, scaling them from 1 million to 5 million users. In today’s episode, we discuss: • The importance of having both a product-led and a sales-led motion for companies of all sizes • A step-by-step process for implementing PLG • Common pitfalls of layering on PLG • How to audit your existing funnel • Conversion, activation, and retention tactics • Structuring your growth organization from day one, and as it scales — Brought to you by Amplitude—Build better products | Miro—A collaborative visual platform where your best work comes to life | Ahrefs—Improve your website’s SEO for free Find the full transcript at: https://www.lennysnewsletter.com/p/the-ultimate-guide-to-adding-a-plg Where to find Hila Qu: • Twitter: https://twitter.com/HilaQu • LinkedIn: https://www.linkedin.com/in/hilaqu/ Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • Twitter: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ In this episode, we cover: (00:00) Hila’s background (03:26) The outcome of writing guest posts for Lenny’s Newsletter (05:12) Why companies should have PLG and sales (07:58) What PLG is and why it’s so popular (09:41) Zoom, an example of a PLG company (11:24) Common pitfalls in adding a PLG motion (16:06) The spectrum of when PLG makes sense (20:04) What you need to be successful in a product-led growth strategy (24:52) The first step to adding a PLG motion (30:11) What GitLab does and how the sales funnel and PLG funnel work there (34:07) Mapping out the funnel (35:29) Finding leverage and other next steps (38:24) What an aha moment is and conducting an audit (47:30) Activation and conversion (52:17) Why you should start with activation, and who is doing it well (55:24) Retention, the messy part of the funnel (1:00:34) How Hila made an impact on retention at Acorns (1:03:03) The two buckets of data (1:04:56) Tools for implementing a PLG motion (1:08:47) The importance of data (1:10:20) Tips to get started, and why you need to have good data first (1:12:10) How to do a data audit (1:15:04) Building a PLG team (1:22:40) The core growth squad (1:27:51) Lightning round Referenced: • Hila’s guest post on Lenny’s Newsletter: https://www.lennysnewsletter.com/p/five-steps-to-starting-your-plg-motion • Ravi Mehta on Lenny’s Podcast: https://www.lennyspodcast.com/building-your-product-strategy-stack-ravi-mehta-tinder-facebook-tripadvisor-outpace/ • Amplitude: https://amplitude.com/ • GitLab: https://about.gitlab.com/ • Lauryn Isford on Lenny’s Podcast: https://www.lennyspodcast.com/mastering-onboarding-lauryn-isford-head-of-growth-at-airtable/ • Acorns: https://signup.acorns.com/ • PostHog: https://posthog.com/ • Mixpanel: https://mixpanel.com/ • Pendo: https://go.pendo.io/ • Optimizely: https://www.optimizely.com/ • Eppo: https://www.geteppo.com/ • HubSpot: https://www.hubspot.com/ • Clearbit: https://clearbit.com/ • ZoomInfo: https://www.zoominfo.com/ • Endgame: https://www.endgame.io/ • Pocus: https://www.pocus.com/ • Pace: https://www.paceapp.com/ • Toplyne: https://www.toplyne.io/ • Crystal Widjaja on Lenny’s Podcast: https://www.lennyspodcast.com/how-to-scrappily-hire-for-measure-and-unlock-growth-crystal-widjaja-gojek-and-kumu/ • Redshift: https://aws.amazon.com/redshift/ • The Almanack of Naval Ravikant: A Guide to Wealth and Happiness: https://www.amazon.com/Almanack-Naval-Ravikant-Wealth-Happiness-ebook/dp/B08FF8MTM6 • How Women Rise: https://www.amazon.com/How-Women-Rise-Habits-Holding/dp/1847942253/ • 硅谷增长黑客实战笔记 (Hila’s best-selling book on growth): https://www.amazon.com/dp/B07BZC8L78?ref_=cm_sw_r_cp_ud_dp_ND87BRFMB0CMWBEVB747 • The Wandering Earth II: https://wellgousa.com/films/wandering-earth-ii • The Three-Body Problem: https://www.amazon.com/Three-Body-Problem-Cixin-Liu/dp/0765382032 • Lululemon yoga pants: https://shop.lululemon.com/c/women-pants/yoga/ • ChatGPT: https://chat.openai.com/chat • Someday: https://www.amazon.com/Someday-Alison-McGhee/dp/1416928111 Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

Segments Timeline

1
0:00 - 0:40
0:40 duration102 words

The Power of Data in PLG

Hila Qu emphasizes the importance of data-led growth in product-led growth (PLG) strategies. She explains that giving away a free product should yield broader reach and insights into user behavior, which are crucial for understanding conversion and retention rates. Without a solid data foundation, companies risk giving away products without gaining valuable insights.

"pod I always say is actually fundamentally dlg data LED growth so when you give away your free product what you want to get in exchange are two things one is the broader reach because free product spr..."

2
0:40 - 1:47
1:07 duration206 words

Welcome to Lenny's Podcast

Lenny introduces Hila Qu, highlighting her expertise in product-led growth and her impactful guest posts. He encourages listeners to engage with the episode, which is packed with actionable advice on optimizing PLG strategies, common pitfalls, and foundational concepts. This segment sets the stage for a deep dive into the intricacies of PLG.

"nothing welcome to Lenny's podcast where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products today..."

3
1:47 - 3:26
1:38 duration287 words

The Impact of Guest Posts

Hila shares the positive outcomes from writing guest posts for Lenny's Newsletter, including increased visibility and new connections in the industry. She reflects on the long-term benefits of writing and how it has led to unexpected opportunities, such as advisory roles and networking with influential figures.

"sponsors this episode is brought to you by amplitude if you're setting up your analytics stack but not using amplitude what are you doing anyone can sell you analytics while amplitude unlocks the powe..."

4
3:26 - 4:40
1:13 duration222 words

The Dual Motion: PLG and Sales

Hila discusses the necessity of integrating both product-led growth and sales strategies in modern businesses. She argues that having a PLG motion lowers barriers for user engagement while a sales team can target larger customers. This dual approach allows companies to maximize their reach and revenue potential.

"thank you Lenny for having me I'm so excited I'm excited as well I don't know if you know this but you have the very unique distinction of having two posts in my top 25 most read posts of all time and..."

5
4:40 - 5:49
1:09 duration204 words

The Evolution of PLG

Hila explains how the perception of PLG has evolved, especially in the B2B sector. She notes that end users now expect to try products before committing, similar to B2C experiences. This shift is driving companies to adopt PLG strategies to remain competitive and meet user expectations.

"didn't expect reading it reach out to me let me know hey I read that for example I think Ravi he is also on your podcast I didn't know him personally one day he's just like hila I read that that's awe..."

6
5:49 - 7:16
1:26 duration259 words

Common Pitfalls in PLG Implementation

Hila outlines the common mistakes companies make when trying to implement a PLG strategy. She emphasizes the need for a low barrier to entry, such as free trials, and warns against relying solely on traditional sales methods. Companies must commit to a comprehensive PLG approach rather than viewing it as a simple add-on.

"actually are having both they have a plg motion they have a sales team as well plg motion is perfect for lowering the barrier for more people to try broader the reach it's a kind of a volume kind of g..."

7
7:16 - 8:01
0:44 duration152 words

Understanding Product-Led Growth

Hila provides a clear definition of product-led growth, explaining its core attributes and why it is gaining traction. She highlights the importance of self-service components and low entry barriers, which allow users to engage with products without needing sales intervention.

"I think eventually you need both cool that's kind of the way I've been seeing it like I did a few series on uh product LED like traditional product like growth companies slack and figment all those gu..."

8
8:01 - 9:40
1:39 duration277 words

Attributes of PLG Products

In this segment, Hila discusses the key characteristics of successful product-led growth products. She uses Zoom as an example, illustrating how users can experience the product without a sales pitch, emphasizing the importance of self-service and low barriers to entry in driving user adoption.

"helpful just to explain like what is product like growth just simply because that people hear this term a lot and it'd be helpful just to understand it broadly and then also just like why is it so pop..."

9
9:40 - 10:53
1:12 duration219 words

Common Pitfalls in PLG Motion

Hila elaborates on the common pitfalls companies face when adding a PLG motion. She stresses the importance of having a dedicated team and a well-thought-out strategy rather than treating PLG as a trend. Companies must understand the full implications of implementing PLG to avoid superficial changes.

"and more popular to pull on that thread a little bit more even to help people like visualize a product collect growth product what makes it product LED like there's a self-serve component is there any..."

10
10:53 - 12:10
1:17 duration238 words

Commitment to PLG

Hila discusses the level of commitment required for successful PLG implementation. She warns against the misconception that launching a free trial is sufficient and emphasizes the need for a long-term roadmap and dedicated resources to support the transition to a product-led growth model.

"so I think the Key Properties also plg products think about it should have a very low barrier to entry usually it has a free version free trial you don't need to get get approval from your boss to use..."

11
12:10 - 13:34
1:24 duration238 words

Red Flags of Lack of Commitment

In this segment, Hila identifies red flags that indicate a lack of commitment to PLG initiatives. She highlights the dangers of viewing PLG as a simple addition rather than a comprehensive strategy, stressing the need for dedicated teams and a deeper understanding of the PLG process.

"tool can you come back to me and allow me to see a demo of your product that means the the entry point to plg is cut off instead the first step is you need to either have a free product free trial som..."

12
15:42 - 17:09
1:27 duration245 words

Red Flags in PLG Commitment

Hila Qu discusses the common misconceptions and red flags that indicate a lack of genuine commitment to implementing a Product-Led Growth (PLG) strategy. She emphasizes the importance of understanding that PLG is not just about launching a free trial but requires a comprehensive approach, including dedicated teams and strategic thinking. Founders often mistakenly believe that simply offering a free version will lead to conversions without considering the necessary activation and upgrade paths.

"journey is very different from the sales user Journey like those are sometimes missing in company when they just begin to doing this and in those cases I think it's super helpful to maybe either find ..."

13
17:09 - 19:00
1:51 duration316 words

Understanding the PLG Spectrum

In this segment, Hila Qu explains that while many companies should consider adding a PLG component, not all are suited for it. She highlights the spectrum of suitability for PLG, using defense contractors as an example of companies that may not benefit from a PLG approach. Hila stresses the need for businesses to evaluate their product complexity and customer base before committing to a PLG strategy.

"when red flag basically they are not thinking about the entire thing through understanding the implication not only the free product it's really just a start you need to think about how to activate ho..."

14
19:00 - 24:24
5:23 duration975 words

Key Components for Successful PLG

Hila outlines the essential elements needed for a successful Product-Led Growth strategy. She emphasizes the importance of having a free version or trial, a quick time to value, a self-service checkout experience, and a strong data foundation. Hila also discusses the significance of guiding users through their journey from activation to conversion, ensuring that the product experience is seamless and intuitive.

"point I thought that was really interesting we talked about how every company probably should add a product-led growth piece but I think what you're also saying is actually not every company there are..."

15
24:24 - 30:11
5:47 duration956 words

Mapping the PLG Funnel

In this segment, Hila Qu shares insights on how to effectively map out the PLG funnel compared to traditional sales funnels. She explains the differences in approach, emphasizing that product usage is a leading indicator of success in PLG. Hila discusses the importance of understanding user behavior and creating pathways for conversion, including the concept of Product Qualified Leads (PQLs) and how they differ from traditional leads.

"just imagine you are building uh you're selling kind of something on e-commerce side you need all of this right just in order for the B2B buyer to buy or software in plg motion you need to make all th..."

16
30:11 - 34:08
3:56 duration713 words

GitLab's PLG and Sales Integration

Hila provides a detailed example of how GitLab integrates its PLG and sales strategies. She explains the dual funnel approach, where users can sign up for a free trial while also having access to sales support. Hila illustrates how individual users can drive company-wide adoption of GitLab's platform, showcasing the effectiveness of a well-structured PLG strategy that leverages both self-service and sales engagement.

"so you talked about these two funnels one question is are they basically the same for almost every product or should you try to figure out what's like really unique about my funnel and then second is ..."

17
34:10 - 35:30
1:19 duration256 words

Mapping Out the PLG Funnel

In this segment, Hila emphasizes the significance of mapping out the product-led growth funnel. She discusses the initial steps of identifying key components such as free versions and checkout flows, and the importance of detailing user experiences at each stage to optimize the funnel for better conversion rates.

"last question on this first step of mapping out the funnel do you recommend people just get in front of a whiteboard and just sit together and like here's what it would be potentially if we added a pr..."

18
35:30 - 36:19
0:49 duration147 words

Finding Leverage in Growth

Hila shares her approach to finding leverage in growth strategies, advocating for a focus on areas that yield maximum impact with minimal investment. She discusses the importance of conducting a full funnel audit to identify starting points for improvement in product-led growth initiatives.

"to the next question which is just okay mapped out the funnel what do you do next if you don't have the foundational components you need to build all of that but if you kind of have something if you a..."

19
36:19 - 39:00
2:40 duration463 words

Understanding the Aha Moment

This segment delves into the concept of the 'aha moment'—the point at which users first experience the value of a product. Hila explains how GitLab defines this moment and its significance in driving user retention and conversion, using examples from Facebook's early growth strategies.

"and just like finding Leverage is a is a beautiful thing in in my mind so I always want to do that so when I think about Pica starting point one thing I actually do with a lot of my advisor clients as..."

20
39:00 - 41:39
2:38 duration406 words

Defining Aha Moments for SaaS Products

Hila discusses how GitLab identified its specific 'aha moment' for new users, focusing on the importance of user actions that indicate value. She explains the correlation analysis used to determine which user behaviors lead to higher retention and conversion rates, emphasizing the need for experimentation to validate these insights.

"moment is because in early days if you add these friends right you begin to form some connection you can see interesting feeds you can interact with your friends and that's social interaction it's the..."

21
41:39 - 44:02
2:22 duration408 words

Launching Experiments for Growth

In this segment, Hila outlines the process of launching experiments to encourage users to reach their 'aha moments.' She discusses the importance of isolating correlation versus causation in user behavior and the need for continuous testing to improve conversion and retention metrics.

"and I imagine the way you got to that was you looked at at what point does retention improve if they got to a certain Milestone right is that roughly yeah exactly so there are how you can get to that ..."

22
44:02 - 46:32
2:30 duration510 words

Conducting a Product Audit

Hila shares her methodology for conducting a product audit to identify areas for improvement in the user experience. She emphasizes the importance of understanding user journeys, from landing pages to checkout flows, and how to streamline these processes to enhance activation and conversion rates.

"like two actions right it can be any of the two high value features the next step is actually you need to launch some experiments to try to get more people to do those high value action and you then s..."

23
46:32 - 50:22
3:49 duration625 words

Optimizing Activation and Conversion

This segment focuses on strategies for optimizing activation and conversion rates in product-led growth. Hila discusses common pitfalls in the checkout process and the importance of ensuring a seamless user experience, including localized payment options and clear calls to action.

"biggest opportunity uh usually activation commercial are two of the common starting places this episode is brought to you by ahrefs you probably know ahrefs as one of the leading all-in-one SEO tools ..."

24
50:52 - 52:39
1:46 duration355 words

Choosing the Right Growth Focus

Hila Qu outlines three key buckets for product-led growth: acquisition, activation, and conversion. She explains how to determine which area to focus on based on user needs and product capabilities. Activation is emphasized as a critical starting point for B2B software, with examples of successful companies that excel in this area.

"product LED acquisition is a great place to start if you your product is a collaboration software think about airtable and and like it's club figma right I as part of my workflow so I invite my team t..."

25
52:39 - 54:40
2:01 duration326 words

The Importance of Activation

Hila Qu elaborates on why activation is a vital step in the product-led growth journey. She provides examples of companies like Miro that excel in creating seamless activation experiences. By minimizing user friction and quickly demonstrating value, businesses can enhance user retention and drive growth.

"B2B software because usually B2B softwares are not designed uh to really get you to use quickly historically a good example there are I think all the best prg companies they do an awesome job that's a..."

26
54:40 - 56:00
1:19 duration233 words

Retention: The Messy Needle

In this segment, Hila Qu discusses the complexities of user retention in product-led growth. She explains that while activation and conversion are straightforward, retention can be messy and requires ongoing engagement strategies. Hila shares insights on building habits within user workflows to improve retention rates.

"picoa part the other more complicated paths I would say that's something you want to figure out activation and self-checkout a little bit and you want to have some reasonable user number and then inve..."

27
56:00 - 57:06
1:05 duration184 words

Building Habits for Retention

Hila Qu emphasizes the need to create habits in user behavior to enhance retention. She discusses the importance of high-frequency usage and collaboration features in products. By integrating these elements, companies can foster ongoing engagement and ensure users return to the product regularly.

"definitely and I I would talk a little bit about retention expansion if using that's helpful yeah I know I didn't talk about that in the post and there are people asking hey do you plan to write anoth..."

28
57:06 - 1:00:05
2:58 duration482 words

Strategies for Product-Led Expansion

Hila Qu outlines strategies for expanding user engagement and driving retention through product-led growth. She discusses the significance of understanding user data and timing prompts for upselling or cross-selling additional features. By leveraging insights from user behavior, companies can effectively encourage users to explore more of their offerings.

"them so it's a very messy part but how I think about retention there are two steps one is how to build a habit in their usage pattern so that they are using this maybe every week every day like the th..."

29
1:00:05 - 1:01:59
1:54 duration334 words

Retention Success Stories

Hila Qu shares her experiences with retention strategies at Acorns, highlighting the impact of improving activation on overall retention. She discusses specific features that correlate with higher retention rates and the importance of creating a product that encourages regular user interaction.

"different moments how I how you can do that is really understand data understand usage and trigger a lot of the right conversation at the right moment to the right person and you can again a lot of si..."

30
1:01:59 - 1:05:01
3:02 duration513 words

Data Infrastructure for PLG

In this segment, Hila Qu discusses the essential data infrastructure needed for successful product-led growth. She emphasizes the importance of product usage data and a comprehensive customer database. By connecting various data sources, companies can gain a holistic view of user behavior and optimize their growth strategies.

"then from there I would say we begin to add more use cases that has a higher frequency let's like I mentioned right if your only come here once per month to check our investment it's very hard to reta..."

31
1:05:01 - 1:06:44
1:43 duration272 words

Essential Tools for Growth Teams

Hila Qu outlines the key tools and infrastructure that growth teams should consider for effective product-led growth. She recommends data hubs, analytics tools, and experimentation platforms to facilitate data-driven decision-making and optimize user experiences.

"start with maybe what's like gila's recommendations on like an initial stack or areas to explore in terms of tooling I I say there are two piece one is infra the other piece are some tools that are ki..."

32
1:06:47 - 1:08:50
2:02 duration324 words

Optimizing Activation and Conversion

Hila discusses the significance of activation and conversion in a PLG strategy. She shares insights on using tools like Appcues for onboarding and highlights the importance of understanding user behavior to enhance conversion rates. This segment provides actionable advice for companies looking to improve their user engagement and conversion pathways.

"do they take the right action in a product versus the the nurture email marketing to his do I get them to read the article open the email I had 10 points to their lead score and their next step furthe..."

33
1:08:50 - 1:10:21
1:30 duration245 words

The Importance of Data in PLG

Hila emphasizes that product-led growth is fundamentally data-led. She explains how investing in data collection and analysis can empower not just the PLG motion but the entire product and customer success teams. This segment underscores the necessity of having a solid data foundation to inform product decisions and enhance customer experiences.

"really well structured is there anything else along the data or infrastructure piece that you want to touch on before we move on to hiring in the team I just want to go back to the point as I mentione..."

34
1:10:21 - 1:12:11
1:50 duration352 words

Conducting a Data Audit

In this segment, Hila provides guidance on performing a data audit to ensure effective data instrumentation. She discusses the importance of aligning key actions with data tracking and creating a data dictionary for clarity across teams. This process is crucial for companies to establish a reliable data foundation before implementing analytics tools.

"trying to channel what uh listeners might be thinking right now and I imagine some people might be like what if I picked the wrong tool like I'm kind of stressed I have to do all this research I'm kin..."

35
1:12:11 - 1:14:58
2:46 duration519 words

Establishing a Data Warehouse

Hila explains the necessity of having a data warehouse and ETL solutions as companies scale. She highlights that while early-stage companies may start with basic analytics tools, investing in a robust data infrastructure is essential for long-term success. This segment discusses best practices for setting up a data warehouse to support data-driven decision-making.

"that audit is there a thing you would Point them to or I don't know blog course something to help them understand if they're doing it right or is it like bringing Gila on and and you need someone like..."

36
1:14:58 - 1:17:00
2:02 duration346 words

Building Your Initial PLG Team

Hila shares her insights on forming an initial PLG team, emphasizing the role of a head of growth or growth PM. She discusses the importance of cross-functional collaboration and how to structure the team to focus on key growth areas. This segment provides a roadmap for companies looking to establish a dedicated growth team.

"well and we say AWS you mean a redshift I imagine yeah cool awesome okay final area that uh we have time for which is awesome which is around building your team so maybe just two questions here what i..."

37
1:17:00 - 1:20:03
3:03 duration532 words

Evolving Your Growth Organization

In this segment, Hila discusses how to evolve a growth organization after establishing an initial team. She emphasizes the importance of securing early wins to build momentum and confidence in PLG. Hila outlines the need for collaboration across product, marketing, and sales teams to manage the growth funnel effectively.

"difference between these two one is dedicated we are going to dedicate full-time people to helping us grow yeah like say we talked about earlier let's say they're going to focus on activation yeah and..."

38
1:20:03 - 1:23:00
2:56 duration461 words

Key Functions of a PLG Team

Hila concludes by detailing the essential functions within a PLG team, highlighting the need for a growth PM and cross-functional support. She explains how these roles contribute to the overall success of the PLG strategy and the importance of aligning metrics across teams to drive growth. This segment wraps up the discussion on building a successful PLG framework.

"to potentially expand and formalize so fundamentally I think you should should not only think about a prg team you should think about the prg org because plg is a motion uh it's cross-functional by Na..."

39
1:22:22 - 1:23:59
1:36 duration265 words

Essential Roles in a PLG Team

Hila outlines the critical roles needed in a minimum viable product-led growth (MVP PLG) team, emphasizing the importance of having a growth product manager (PM) and a data analyst as foundational hires. She discusses the skill sets required for these roles and how they contribute to the overall success of the growth strategy.

"got it and you're sharing a lot of org design verbally in the post virtual share obviously in the show notes you can actually see a diagram of what these look like to help kind of make it super clear ..."

40
1:23:59 - 1:25:31
1:32 duration252 words

Internal vs. External Growth PM Hiring

Hila shares insights on whether to hire growth product managers (PMs) internally or externally. She discusses the advantages of promoting from within and the potential for external hires, providing guidance on how to align the hiring process with the company's growth focus, whether it be activation, conversion, or acquisition.

"PM analysts and from there definitely you need some dedicated engineer you need a designer designer can be somewhat not dedicated in early days but engineer needs to be some sort of a user research su..."

41
1:25:31 - 1:27:36
2:05 duration362 words

Lightning Round: Growth Insights

In a rapid-fire segment, Hila Qu answers a series of questions about her favorite books, movies, and interview techniques. She shares valuable insights on growth concepts, including the importance of experimentation and the North Star metric, which guides both personal and professional growth.

"initial growth PM higher to your starting point next if we already decided activation right he's the biggest Focus era try to find some PM gross PM with that experience and if if like the conversion i..."

42
1:27:36 - 1:32:55
5:18 duration933 words

Connecting with Hila Qu

Hila Qu wraps up the discussion by inviting listeners to connect with her on LinkedIn and offering her support to founders seeking growth advice. She emphasizes her passion for growth and her willingness to engage with others in the field, highlighting the importance of community and collaboration in achieving success.

"and we'll link to all these okay favorite recent movie or TV show I watched a movie it's a sci-fi movie from China it's called the wandering Earth 2. it's by the famous author the scene Leo he's the a..."