I’ve seen it happen a thousand times. A founder has a brilliant idea, a product with massive potential. They pour their heart and soul into building it, convinced they’re on the cusp of something huge. They launch with a flurry of excitement, but then… crickets. The growth stalls. The hockey stick chart looks more like a flat line. What went wrong?
More often than not, the answer lies in a few common, yet critical, mistakes in their product-led growth (PLG) strategy. It’s a term that gets thrown around a lot in Silicon Valley, but few truly understand what it means to build a business that sells itself. It’s not just about having a free trial or a freemium tier. It’s a fundamental shift in mindset, a completely different way of thinking about how your product, your users, and your business model all work together.
I’ve learned these lessons the hard way, through the school of hard knocks. I’ve built and sold two companies, RemoteTeam to Gusto and MovieLaLa to Gfycat. I’ve also had the privilege of being an early investor in over 200 startups, including some of the most iconic companies of our time like OpenAI, Anthropic, Scale AI, and Hugging Face. I’ve seen the patterns of success and failure up close. And I can tell you that the difference between the startups that take off and the ones that fizzle out often comes down to avoiding a few key pitfalls.
So, I want to pull back the curtain and share the unvarnished truth about what it really takes to build a successful product-led growth company. No jargon, no fluff. Just the real, raw, and sometimes painful lessons I’ve learned from my own journey as a founder and investor. Here are the four biggest PLG mistakes that I see founders make, over and over again.
Mistake #1: The Empty Stadium: Chasing Users, Not Fans
Remember that feeling in high school when you’d throw a party? You’d spend all week telling everyone about it, plastering flyers everywhere. The night comes, the house is packed, music’s blasting. From the outside, it looks like the party of the year. But then you look closer. Half the people are just standing around awkwardly, not talking to anyone. The other half are just there for the free food and will be gone in an hour. That’s what focusing on acquisition over activation feels like. You’ve built an empty stadium.
We fell right into this trap with RemoteTeam. We were so proud of our signup numbers. We’d have these weekly meetings and pat ourselves on the back. “We got 10,000 new signups this week!” It was a vanity metric, pure and simple. It felt good, but it didn’t mean anything. Our active user count was stagnant. We were pouring users into the top of the funnel, and they were flowing right out the bottom. A leaky bucket.
It’s an easy mistake to make. Acquisition is sexy. It’s easy to measure. You can throw money at Google Ads or Facebook Ads and see the numbers go up. It gives you a false sense of progress. But it’s a sugar high. The real, sustainable growth comes from activation. It’s about getting users to that “aha!” moment as quickly as possible. That moment where they experience the core value of your product and think, “Wow, I need this in my life.”
For us, that “aha!” moment was when a user created their first remote team and invited their first team member. That was the magic. That was when they saw the power of our product. So we obsessed over it. We redesigned our entire onboarding flow to get users to that moment as frictionlessly as possible. We A/B tested everything. We added a checklist. We sent triggered emails. We did whatever it took to get them to that one key action. And it worked. Our activation rate tripled. Our churn dropped. And that’s when the real growth started.
Mistake #2: The Swiss Army Knife Syndrome: More Features, Less Value
Have you ever seen one of those giant Swiss Army knives with 50 different tools? It’s got a magnifying glass, a fish scaler, a tiny pair of scissors. It seems impressive at first, but when you actually try to use it, it’s a clunky, confusing mess. You can’t find the one tool you actually need, and none of them work very well. That’s what happens when you fall into the trap of building a “Frankenstein” product.
I’ve been there. At MovieLaLa, we started with a simple, elegant idea: a beautiful app to discover new movies. And people loved it. But then the feature requests started pouring in. “You should add a social network!” “What about a news feed?” “Can I buy tickets in the app?” We were so eager to please our users that we said yes to everything. We kept bolting on new features, and before we knew it, our beautiful, simple app had become a monster. It was a bloated, confusing mess. A Swiss Army knife that was good at nothing.
It’s a classic founder mistake. You get so caught up in the “what if” that you lose sight of the “why.” You start chasing every shiny new object, every potential use case. You’re so afraid of missing out on a potential market that you end up building a product for no one. The truth is, the most successful products are not the ones with the most features. They’re the ones that do one thing, and do it exceptionally well. They have a clear, focused value proposition. They solve a specific problem for a specific audience.
We had to make a painful decision at MovieLaLa. We had to kill our darlings. We took a hard look at our product and stripped out everything that wasn’t core to our original vision. We went back to being the best damn movie discovery app on the planet. And it was the best decision we ever made. Our engagement skyrocketed. Our users were happier. And eventually, we were acquired by Gfycat. The lesson? Be a scalpel, not a Swiss Army knife. Be ruthless in your focus. Your product will be better for it.
Mistake #3: The Silent Masterpiece: Building a Great Product Isn’t Enough
You can build the most beautiful, elegant, life-changing product in the world, but if no one knows about it, it doesn’t matter. It’s like a masterpiece painting locked away in a dusty attic. This is the mistake of ignoring the power of virality. So many founders believe in the myth of “if you build it, they will come.” But that’s a fairy tale. In today’s crowded market, you have to build the marketing into your product. You have to give people a reason to talk about you.
This is the heart of product-led growth. It’s about turning your users into your sales force. It’s about creating a product that is inherently shareable. A product that has a built-in viral loop. Think about the last time you discovered a new app or a new tool that you loved. What did you do? You probably told a friend about it. You sent them a link. You showed them how it worked. That’s a viral loop in action.
Dropbox is the canonical example, of course. Their referral program was pure genius. “Get 500MB of free space for every friend you refer.” It was a simple, powerful incentive that turned their users into an army of evangelists. But you don’t have to be Dropbox to build virality into your product. There are a million ways to do it. You can offer a discount, a free month of service, early access to new features, or even just a simple “share with a friend” button.
At RemoteTeam, we made it incredibly easy for users to invite their colleagues. That was our viral engine. When a manager set up a new team, they were prompted to invite their team members. And when those team members joined, they were prompted to invite their own teams. It created a natural, organic growth loop that was far more powerful than any ad campaign we could have run. We also experimented with a referral program that gave users a discount for every new customer they brought in. It was a win-win. Our users got a discount, and we got a new customer. The key is to find what works for your product and your users. But whatever you do, don’t just build a great product and hope for the best. Build a product that people can’t help but share.
Mistake #4: The Charity Case: Forgetting to Ask for the Money
This one might sound obvious, but you’d be surprised how many founders are afraid to ask for money. They have this romantic notion that if they build a great product, the money will just magically appear. They treat their startup like a charity, not a business. And it’s a fatal mistake. You can have the most amazing product in the world, with millions of adoring users, but if you don’t have a clear and compelling monetization strategy, you don’t have a business. You have a hobby.
I get it. It can feel awkward to ask people for money. Especially when you’re just starting out. You’re so grateful for every user you have that you don’t want to scare them away with a price tag. But you’re not doing them any favors by giving your product away for free. If you’re not making money, you can’t invest in your product. You can’t hire more engineers. You can’t build new features. You can’t provide great customer support. Eventually, your product will stagnate and die. And then everyone loses.
There are a million different ways to monetize a PLG business. You can have a free trial, a freemium plan, a usage-based model, a per-seat model, or some combination of all of the above. The right model for you will depend on your product, your market, and your customers. There’s no one-size-fits-all answer. You have to be willing to experiment. You have to be willing to talk to your users and understand what they’re willing to pay for.
At RemoteTeam, we went through several iterations of our pricing model. We started with a simple, flat-rate subscription. But we quickly realized that it wasn’t working for everyone. Some of our smaller teams felt like they were overpaying, while some of our larger teams were getting a bargain. So we switched to a usage-based model, where you paid per team member. It was a much fairer and more scalable model. It aligned our incentives with our users’ incentives. The more value they got from our product, the more they paid. And it was a game-changer for our business.
The Takeaway: It's Your Turn
Building a product-led growth company is a marathon, not a sprint. It’s a journey filled with ups and downs, triumphs and failures. But if you can avoid these four common pitfalls, you’ll be miles ahead of the competition. So, to recap:
- Build a stadium of fans, not just a crowd of users. Focus on activation, not just acquisition.
- Be a scalpel, not a Swiss Army knife. Focus on doing one thing exceptionally well.
- Build the marketing into your product. Don’t just build a great product and hope for the best.
- Don’t be afraid to ask for the money. You’re not running a charity.
I’ve lived and breathed these lessons. I’ve seen them play out in my own companies and in the countless startups I’ve advised and invested in. They’re not just theories. They’re battle-tested principles that have been forged in the fires of entrepreneurship. Now, it’s your turn to put them to the test. The world is waiting for your great idea. So go out there and build it. And if you ever want to chat, you can find me on Twitter @sahinboydas. I’m always happy to connect with fellow founders who are crazy enough to think they can change the world. Because those are the ones who usually do.
Frequently Asked Questions
How were these items selected?
Each item on this list comes from direct experience, either from building my own companies or from patterns I've observed across the 200+ startups I've invested in. I prioritize practical, actionable items over theoretical concepts.
Can I implement all of these at once?
I'd strongly recommend against it. Pick the 2-3 items that resonate most with your current situation and focus there. Trying to do everything simultaneously is a recipe for doing nothing well.
Which item on this list has the highest impact?
It depends on your stage and context, but in my experience, the items near the top of the list tend to have the broadest applicability. That said, sometimes the less obvious items create the biggest breakthroughs for specific situations.
How do I know which items apply to my situation?
Start by honestly assessing where your biggest bottleneck is right now. The items that address that specific constraint will give you the highest return on your time and energy.