You're here when: You're designing (or redesigning) how prospects first interact with your product. Each model implies a different sales motion, and picking wrong wastes months.
The Heuristic
- If the product's value is obvious within minutes, free trial. The product sells itself when someone uses it. Minimal setup, immediate payoff. Your job is to remove friction, not add salespeople. Think Slack, Notion, or Figma.
- If the product needs context to understand, demo-first. Complex products, technical integrations, or solutions where the value depends on the prospect's specific situation. The demo lets you map the product to their pain. Without it, they'll open a trial, feel confused, and leave.
- If you're targeting individual users in a large market, freemium. Freemium works when you can afford a low conversion rate (1-5%) because the total addressable market is huge. It does not work when your market is 500 companies and you need 50 of them to pay.
- If the deal is high enough complexity that multiple stakeholders, procurement, security review, or meaningful setup show up, lean demo-first. ACV is a clue, not the rule. The real test is whether the product can explain itself and deliver value without human guidance.
Quick Example
Calendly nailed the free trial model because the value is obvious in one interaction: you send someone a scheduling link, they book a time, and you never email back and forth again. No demo needed. Palantir, on the other end, requires a multi-month engagement where their team embeds with the customer. A free trial would be meaningless because the product only delivers value when configured for a specific use case.
The real question isn't which model forever, it's which model first. Figma is a clean example. It started as pure PLG: free product, bottom-up adoption, no salespeople. But as usage grew, "hand raisers" appeared, users filling out forms asking about the business tier. That signal, buyers actively requesting a sales conversation, was the trigger to layer a sales motion on top. The team used product usage data (number of design editors, team size, feature adoption) to build product-qualified leads (PQLs) and prioritize which accounts to contact. The sales motion didn't replace PLG, it amplified it. The lesson: once users start asking for a higher-touch buying path, meet them there.
The Anti-Pattern
The PLG Cargo Cult. Adding a free tier because "that's what modern SaaS does" without considering whether your product can demonstrate value without human guidance. The result: thousands of free signups who never activate, a support team drowning in questions from non-paying users, and a conversion rate that rounds to zero. PLG works when the product can sell itself. If it can't, the free tier is just an expensive marketing channel with terrible ROI.
Written with ❤️ by a human (still)