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Amol Ghemud Published: February 22, 2026
Summary
Choose your GTM model based on three factors: Average Contract Value (ACV), product complexity, and buyer persona. Sales-led works for high-ACV ($50K+) products that require customization and for executive decision-makers. Product-led works for low-ACV (under $1K), self-service products, and technical end-users. Hybrid works for $1K-$50K in ACV and for products that serve both self-service and enterprise needs.
Each model has different unit economics, scaling profiles, and team structures. Most successful companies eventually operate all three in parallel, but starting with the right primary motion is critical to early success. Your GTM motion is how you acquire customers and convince them to buy. The model you choose at the seed stage will influence your company’s trajectory for years to come.
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Choose your GTM model based on three factors: ACV, product complexity, and buyer persona. Learn which model fits your business and how to transition between models as you scale.
Each has fundamentally different mechanics, economics, and team structures. The model you choose at the seed stage will influence your company’s trajectory for years.
Product-led Growth (PLG): Let the Product Sell Itself
How PLG works
In PLG, the product itself is your primary sales tool. Customers discover your product, try it for free (freemium model or free trial), experience its value, and upgrade to a paid plan.
The customer journey is:
Free signup or trial.
Activation (getting value from the product).
Engagement (regular use).
Expansion (higher plans or additional features).
Retention or churn.
Sales and marketing accelerate this journey, but the product itself drives conversion.
Freemium Model: Users get a free tier with limited features. They can upgrade to paid features when they hit limitations. Examples: Slack (limited message history), Figma (limited files), Dropbox (limited storage).
Free Trial: Users get full product access for 7-30 days, after which they must upgrade or lose access. Examples: Notion, Intercom, many SMB tools.
Usage-Based Pricing: Users pay based on consumption (API calls, storage, compute). They start free or at a low tier and upgrade as they use more. Examples: AWS, Twilio, Stripe.
Activation-Focused Onboarding: Your onboarding must get users to experience value in their first session. If activation happens in week 1, you keep customers. If it happens in week 3, you lose them to churn.
Product-Driven Expansion: The product itself signals upgrade opportunities. When users hit a limitation, they see an upgrade prompt.
Pros of PLG:
Low CAC: You don’t pay sales salaries, so customer acquisition cost is primarily the cost of the product itself and basic marketing.
Fast Product Feedback Loop: Every interaction with users teaches you what works. You iterate quickly.
Better Product-Market Fit Signal: Users choose to upgrade because they get value, not because a salesperson convinced them.
Scalable User Base: Each user can become an advocate. Referral loops are natural in PLG.
Predictable Churn: If users don’t see value, they leave quickly. You know what’s broken fast.
Cons of PLG:
Lower Average Revenue Per Account: Most free users never upgrade. ARPA is often 2-3x lower than the sales-led model.
Longer Path to Enterprise: Enterprise customers want support, customization, and contracts. PLG doesn’t provide these.
Product Complexity Challenges: If your product is inherently complex, free users often churn before experiencing value.
Brand Awareness Requirements: PLG depends on users discovering your product. Without a strong brand or community, you’re invisible.
Retention Risk: When users churn, you lose them completely. No customer success relationship to prevent it.
PLG Metrics that Matter
Activation Rate: % of signups that perform a key action in their first week. Above 60% is good; above 80% is excellent.
Time to Value: How long until users experience a meaningful benefit? Measured in days or hours, not weeks.
Free-to-Paid Conversion Rate: % of free users who upgrade to paid. 2-5% is typical; 10%+ is excellent.
CAC (Blended): Cost per free signup (marketing spend) plus cost per paying customer. Usually much lower than sales-led.
LTV:CAC: Customer lifetime value divided by CAC. PLG usually has higher LTV: CAC ratios (5:1 or higher) because CAC is low.
PLG Case Studies
1. Slack: PLG Masters
Slack grew to $100M+ ARR through PLG. Their free tier gave unlimited users (but limited message history). Teams could try Slack for free with unlimited people. They experienced the value immediately through communication.
When they hit limitations, they paid. Slack’s activation was near-instant because the value was obvious. Their expansion came through team growth (more seats) and administrative controls (paid features).
2. Figma: PLG for Complexity
Figma is a complex design tool that could have been sold more aggressively. Instead, they bet on PLG. Free users could create unlimited files but had limited real-time collaboration.
The product was so intuitive and valuable that designers wanted to use it. As teams adopted it, they hit the collaboration limit and upgraded. By letting users experience the product directly, Figma avoided sales friction and built trust.
In sales-led growth, salespeople are central to customer acquisition. Leads come from marketing (ads, content, events), sales development representatives qualify them, account executives have discovery calls and demos, and close deals through negotiation.
The customer journey is:
Awareness (marketing).
Consideration (sales qualification).
Decision (demo and proposal).
Negotiation.
Close.
The salesperson guides the entire journey.
Sales-led Mechanics andBest Practices
Inside Sales (SDR/AE Motion): SDRs handle initial qualification, AEs handle deals. Common for SMB and mid-market deals ($10K-$100K ACV).
Enterprise Sales (Complex): Long sales cycles (4-12 months), multiple stakeholders, customization, and implementation services. AEs work with executive sponsors and build relationships.
Sales Methodology: Most sales-led companies use a defined methodology (MEDDIC, SPIN, Sandler, etc.) to consistently guide salespeople through deals.
Customer Success as Expansion: After closing the deal, CSMs ensure customers succeed, identify expansion opportunities, and prevent churn.
Contract Length and Commitment: Most sales-led deals are annual or multi-year contracts, often with lock-in. This provides revenue predictability.
Pros of sales-led:
Higher Revenue Per Customer: Enterprise customers pay more than SMB or free users. ARPA is often 10-100x higher than PLG.
Predictable Revenue: Multi-year contracts and lock-in enable accurate revenue forecasting.
Bigger Deal Sizes: Allows you to invest more in product, team, and go-to-market because each customer is worth more.
Customer Customization: You can build custom features, integrations, and solutions for strategic customers.
Salesforce is the canonical sales-led company. They built a $30B+ company primarily through enterprise sales. Their sales cycles were long (6-12 months), their ACV was high ($50K-$500K+), and their customers were complex to implement.
Salesforce invested heavily in sales teams, partners, and customer success. They expanded through new products and acquisitions, selling to existing customers.
2. HubSpot: Sales-Led to Hybrid
HubSpot started with a sales-led approach: Focused on mid-market and enterprise SMB customers. As they scaled, they built a freemium tier and a content marketing engine, transitioning to a hybrid model.
Their free CRM drove trial signups, which converted at high rates when companies grew. This combination of sales (for high-ACV enterprise deals) and freemium (for SMB self-service) lets them dominate both markets.
Hybrid GTM: The best of both worlds
How hybrid works
Hybrid GTM combines product-led and sales-led in parallel. You offer a free or freemium tier that drives SMB adoption and word of mouth. Simultaneously, your sales teams are selling to mid-market and enterprise customers with higher ACVs.
This gives you high volume (from PLG) and high revenue per customer (from sales-led).
The challenge of hybrid is that it requires two different organizational structures, messaging, and product strategies.
Hybrid mechanics
Freemium Tier for Self-Service: Free tier with limited features attracts SMB and individual users. Upgrade path is self-service.
Sales Team for Enterprise: Separate sales team targeting $100K+ ACVs in mid-market and enterprise. They handle complex deals and customization.
Community and Brand: A strong community and brand help free users discover your product. Word-of-mouth drives adoption.
Dual Product Strategy: Product serves both SMB (self-service, simple) and enterprise (complex, customizable) needs.
Pros of hybrid:
Diversified Revenue: Revenue from both SMB (high volume, low margin) and enterprise (low volume, high margin).
Intercom started with a free trial (leaning PLG). As they scaled, they added a sales team to serve enterprise customers seeking on-prem deployments and custom SLAs.
Their hybrid model lets them reach both SMB (who wanted simple chat) and enterprises (who want complex automation). As they matured, they shifted more toward sales-led for their core offering while keeping freemium for exploration and expansion.
2. Zapier: PLG with Sales for Enterprise
Zapier is primarily PLG (free tier with limited automation tasks). Users connect apps and create workflows in a self-service manner.
As Zapier grew, they added a sales team to handle enterprise customers who wanted custom integrations and SLA support. Their hybrid approach lets them dominate SMB while building enterprise relationships separately.
Decision Framework: Which Model is Right For You?
Factor 1: Average contract value (ACV)
For annual ACV under $ 1,000, PLG is almost always the right choice. At $500 ACV, paying a salesperson $100K means you need to close 200 deals annually just to cover salary. This math doesn’t work.
$1,000-$10,000 ACV: Hybrid often works. You can support a small inside sales team that focuses on expansion and high-touch SMB deals, while freemium drives volume.
$10,000-$50,000 ACV: A hybrid typically makes sense. You have enough revenue per customer to support sales teams, but not so much that PLG is wasteful.
$50,000+ ACV: Sales-led is usually required. Enterprise customers expect personal attention, customization, and implementation support. PLG won’t work at this price point.
Factor 2: Product complexity
Simple, Self-Service: Slack, Figma, Stripe, Notion. If your product is intuitive and users can experience value in 15 minutes, PLG works well.
Moderately Complex: Hybrid often works. Free tier for SMB to self-discover, sales team for enterprise customers who need guidance.
Complex, Requires Customization: Salesforce, SAP, Oracle. If implementation takes months and your product requires customization for each customer, a sales-led approach is necessary.
Factor 3: Buyer persona
End-Users (Technical): Developers, designers, operators who use the product directly. These people prefer product-led because they want to try before buying.
Decision-Makers (Non-Technical): CTOs, CFOs, VPs who decide on purchases but don’t use the product daily. These people prefer sales-led because they want education and assurance.
Mixed: Both technical and non-technical buyers. Hybrid often works: technical users discover through product, executives buy through sales.
Choose PLG if: ACV under $10K, simple product, end-users are technical decision-makers, you can achieve high activation and conversion rates, and your brand can sustain word-of-mouth.
Choose Sales-Led if: ACV above $50K, complex product, executive decision-makers, long implementation cycles, and need customization.
Choose Hybrid if: ACV between $5K-$50K, product works for both SMB and enterprise, mixed buyer personas, and you have resources for two teams.
Transitioning Between Models
Your initial choice doesn’t have to be permanent. Many successful companies transition between models as they grow.
1. PLG to Sales-led (or Hybrid)
You start with PLG (low CAC, high volume). As your product becomes critical to customer workflows, you realize that some customers would be willing to pay significantly more for support and customization. You add a sales team targeting these power users.
The risk: your new sales team might cannibalize freemium users who would have upgraded anyway.
The fix: clear segmentation. Sales team targets a specific segment (by company size, industry, use case) where they can deliver unique value beyond what freemium offers.
2. Sales-led to PLG (or Hybrid)
You start with sales-led (high ACV, complex product). As you scale and want to reduce CAC, you add a freemium tier to drive volume and reduce reliance on sales.
The risk: your sales team views freemium as competition rather than top-of-funnel.
The fix: clear incentive alignment. Freemium converts some users to paid at higher ACVs than you’d acquire through sales alone, so blended CAC decreases.
3. Building Hybrid From the Start
Starting hybrid is harder than starting with a single motion because you need to build and scale two GTM engines simultaneously.
Most companies should pick one and scale it to dominance before adding the second. The exception is if you have capital and experienced leadership for both.
Revenue impact analysis by model
PLG Trajectory: Slow initial growth (activation and conversion take time), but accelerates as word-of-mouth and virality kick in. By Series A, growth is 20-30% month-over-month. By Series B, often 40%+ because network effects compound.
Sales-Led Trajectory: Faster initial growth (sales is a known playbook), but scales more slowly because sales cycles and salesperson capacity limit growth. By Series A, typically 15-20% month-over-month.
Hybrid Trajectory: Mix of both. Early growth from the PLG component, scaling from the sales-led component. Typically 20-30% month-over-month at Series A, with more predictable (and higher) revenue than PLG but higher CAC than pure PLG.
Choose the Right GTM Model for Your Business
Your GTM model choice is one of the most important decisions you’ll make as a founder. It determines your team structure, unit economics, sales cycle, CAC, and growth trajectory.
Choose based on your ACV, product complexity, and buyer persona. If your ACV is low and your product is simple, go PLG. If your ACV is high and your product is complex, go sales-led. If you’re in the middle, a hybrid can work, but it is harder to execute.
upGrowth helps B2B SaaS companies choose, build, and scale the right GTM model for their product and market. Our go-to-market strategy services specialize in helping companies transition between models or execute a hybrid GTM successfully.
Yes, but it’s harder. Starting a hybrid means building two GTM engines simultaneously, which requires capital, talent, and focus. Most successful companies start with one and add the other when they’re dominant.
2. What’s the free-to-paid conversion rate I should target for PLG?
Industry average is 2-5%. The top quartile is 8-12%. Above 12% is exceptional. If your conversion is below 2%, your onboarding or value proposition needs work.
3. How much should I charge for a freemium tier?
The free tier should provide enough value that users can see your value proposition. But it should hit limitations quickly (after 1-3 weeks of regular use), so power users need to upgrade.
4. What’s a realistic sales cycle for sales-led companies?
5. Can a PLG company ever build an enterprise motion?
Yes. Once you have significant SMB adoption and a strong product, you can add a sales team targeting enterprise customers. They’ll sell on the strength of your existing brand and customer base.
6. How do I measure unit economics for hybrid companies?
Calculate separately for each motion. PLG CAC (marketing spend divided by free signups who convert to paid). Sales-led CAC (fully loaded salary and marketing spend divided by customers closed). Compare CAC payback, LTV, and efficiency ratio for each.
Amol has helped catalyse business growth with his strategic & data-driven methodologies. With a decade of experience in the field of marketing, he has donned multiple hats, from channel optimization, data analytics and creative brand positioning to growth engineering and sales.
Growth Strategy and Planning
