current
Product-Led Growth Decline
Despite its benefits, product-led growth (PLG) adoption will decline in 2025 due to economic pressures and a focus on short-term AI-driven growth.
Timeframe
near-term
Categories
Impact areas
Detailed Analysis
While PLG has demonstrated potential for higher revenue growth and lower acquisition costs, its adoption is expected to decrease in 2025. "Despite proven cases of higher revenue growth and lower acquisition costs, even less appetite for PLG is expected in 2025 due to a volatile macro business environment, tight budgets, and organizations' need to revamp long-established product teams and motions for PLG adoption." The current economic climate and the allure of quick wins from generative AI initiatives are pushing organizations to prioritize short-term gains over longer-term PLG strategies. "Organizations will put aside efforts to follow a PLG approach (i.e., acquiring users before selling to an account) in favor of pursuing increased sales with generative Al initiatives that they hope dramatically spur growth at lower costs."
Context Signals
Volatile macro business environment and tight budgets
Focus on short-term gains from generative AI initiatives
Challenges in adapting existing product teams and motions for PLG
Edge
Niche B2B SaaS companies with a strong product focus will continue to thrive with PLG, demonstrating its long-term viability.
Hybrid approaches combining PLG with other go-to-market strategies will emerge as a more sustainable model.
