The Journey from Freemium to PLG to SLG: Key Learnings from Dropbox, Salesforce and Vimeo

The 5 Key Things You Need to Know About Modern Go-To-Market

 Adam Gross, former CEO of Vimeo and Heroku and and veteran of Salesforce and Dropbox joined SaaStr Annual for a deep dive on the evolution of SaaS go-to-market strategies. What he shared was pure gold for any SaaS founder trying to navigate the complex world of GTM motions.

1. Why PLG Matters More Than Ever

First, let’s talk numbers. Companies successfully implementing PLG are seeing dramatically lower customer acquisition costs as a percentage of revenue. This isn’t just theory – it’s showing up in the public filings. Plus, these motions are creating more predictable, sticky revenue streams. Who doesn’t want that?

But here’s the real kicker: PLG isn’t just another sales motion. It’s a fundamental business architecture that requires rethinking your entire customer journey.

2. The Evolution of Go-To-Market (And Why It Matters)

Let’s break this down into three distinct eras:

• GTM 1.0: The “Golf Course Era” – Selling to CIOs over lunch
• GTM 2.0: The “SaaS Era” – Online trials, SEM/SEO, inside sales
• GTM 3.0: The “PLG Era” – User-first, experience-driven, bottom-up adoption

Here’s what’s fascinating: The most successful companies don’t abandon previous motions – they layer them. Salesforce started with 2.0 but then masterfully added 1.0 on top. Today’s winners are doing the same with PLG.

3. The Three Pillars of Modern GTM Success

The secret sauce? Understanding that modern GTM has three distinct layers:

1. Free Tier (Measured by Monthly Active Users)
   • Focus: Creation value prop
   • Example: Single-user mode in Dropbox
   • Key Metric: Adoption
2. Team Tier (Measured by MRR)
   • Focus: Collaboration features
   • Example: Shared folders, team workflows
   • Key Metric: Monthly recurring revenue
3. Enterprise Tier (Measured by ACV)
   • Focus: Compliance and security
   • Example: SSO, audit logs, enterprise SLAs
   • Key Metric: Annual contract value

4. The $10M ARR Rule for Enterprise

Here’s a controversial but important take: If you’re under $10M ARR, stay away from Enterprise.

Why? Because too many startups fall into what Gross calls the “Enterprise Mirage” – landing a few big logos through heroic efforts but failing to build repeatable systems. The infrastructure cost for real Enterprise readiness is massive. Wait until you have the resources to do it right.

5. Operational Excellence Is Your New Competitive Advantage

Want to know what separates the winners from the also-rans in GTM 3.0? It’s not just product or sales – it’s operational excellence.

The requirements:

• Rock-solid customer data systems
• Sophisticated sales ops and revops
• Advanced operational data warehousing
• Modern customer data platforms

And here’s the part that might surprise you: This needs to be a CEO-level priority. Your customer schema is as important as your product roadmap.

The Hard Truth About Implementation

Here’s what nobody tells you about PLG: It’s not something you can just bolt onto your existing business. It requires:

• Distinct products for each tier
• Different value propositions
• Separate price points
• Aligned organizational structures

The companies that fail at PLG usually try to treat it as an add-on feature rather than a fundamental business transformation.

Making It Work: The Organizational Playbook

Want to make this work? Here’s your playbook:

1. Create squad teams around each pillar (Free, Team, Enterprise)
2. Include cross-functional representatives in each squad
3. Sync priorities quarterly while maintaining functional autonomy
4. Implement common reporting frameworks
5. Hold regular stakeholder meetings to maintain alignment

The Bottom Line

The journey from freemium to PLG to SLG isn’t optional anymore – it’s becoming the default path for modern SaaS companies. But success requires more than just checking boxes. It requires fundamental organizational transformation and a long-term commitment to operational excellence.

Remember: You don’t have to do everything at once. Start with one or two pillars, excel there, and then expand. It’s better to do a few things extraordinarily well than to do everything mediocrely.

And a final note: If you’re still thinking about PLG as just a sales motion, you’re missing the point. It’s a business model, an organizational framework, and ultimately, a path to building a more efficient, customer-centric company.