Reserv’s Self-Service Autopsy: 7 Signs Your PLG Strategy Is Failing

Reserv’s Self-Service Autopsy: 7 Signs Your PLG Strategy Is Failing

The red flags were there from the beginning. But like many founders chasing the product-led growth dream, Reserv’s team rationalized away the warning signs for years. In a recent episode of Category Visionaries, Martha Dreiling, Co-Founder & President of Reserv, walked through the early indicators that their self-service strategy was fundamentally broken—signals that were visible within months but took years to act on.

Sign 1: Customers Never Come Back

The first and most obvious red flag appeared immediately after launch. Reserv’s self-service product made it incredibly easy for customers to spin up websites. The onboarding was smooth, the initial value delivery was fast, and customers successfully deployed sites. Then they disappeared.

“It was really easy for them to spin up a site and then not ever talk to us again,” Martha explains. This pattern repeated consistently across the customer base. Sign up, deploy, go silent. No follow-up engagement, no expansion conversations, no deeper relationship development.

In a healthy PLG motion, initial adoption leads to continued engagement. Users discover additional features, invite teammates, expand usage, or encounter new needs that drive upgrades. The product creates its own demand for more product. When customers extract value once and never return, you don’t have product-led growth—you have a one-time transaction business poorly disguised as SaaS.

This should have been an immediate alarm. Within the first few months of self-service availability, the engagement patterns showed customers weren’t naturally expanding their usage. But the team rationalized: maybe they just need time to realize the value, maybe we need better onboarding for advanced features, maybe next cohort will be different.

Sign 2: Unit Economics That Never Improve

The second red flag was staring at them from the spreadsheet. Average contract value hovered around $4,000 annually. Churn was approaching 50%. Customer acquisition costs weren’t decreasing with scale. The math didn’t work and showed no signs of improving.

“You’re never going to make enough money off of those customers to recoup your cost of acquisition,” Martha states. This wasn’t a matter of optimizing the funnel or improving retention by a few percentage points. The fundamental economics were underwater and sinking deeper.

In successful PLG businesses, unit economics improve over time as the product develops viral loops, word-of-mouth reduces CAC, and natural expansion increases ACV. When Reserv looked at cohort analysis, they saw none of these improvements materializing. Early customers looked identical to later customers in terms of spend and retention patterns.

The rationalization: we just need more scale, the metrics will improve once we have network effects, we need to give it more time to mature. But network effects that don’t appear in early cohorts rarely materialize later. The product either has viral characteristics or it doesn’t.

Sign 3: No Natural Viral Loops

This connected directly to the third warning sign. “You really need a product that has that viral loop,” Martha emphasizes. Reserv’s self-service product lacked any mechanisms that naturally drove users to invite others or expand usage.

A customer would spin up a website, accomplish their goal, and have no reason to bring in teammates, create additional sites, or upgrade to higher tiers. The product delivered complete value in a single, isolated transaction. There was no collaboration that required inviting colleagues, no data accumulation that became more valuable over time, no features that unlocked with expanded usage.

Within months, this absence should have been definitive. If the product doesn’t create organic reasons for expansion or viral spread early on, those characteristics won’t spontaneously develop. The team kept hoping that building more features would create expansion opportunities, but the core product architecture wasn’t designed for viral growth.

Sign 4: Wrong Customers Responding to Marketing

The fourth red flag appeared in who was actually responding to Reserv’s marketing. The self-service product was supposed to be a wedge into enterprise accounts—small teams within large organizations would adopt it, prove value, then evangelize for broader enterprise deployment.

Instead, what showed up were small businesses and teams looking for exactly what the product offered: a simple, low-cost website builder. “We were getting inquiries from people who wanted to use the self-service product and thought that was what Reserv was,” Martha recalls.

When sales tried to engage these prospects about enterprise solutions with contracts averaging $250,000 annually, the response was shock. “And so when they came inbound and we’re like, oh, you know, average deal size is 250k a year, they were like, what? No, we were going to spend $99 a month.”

This mismatch between intended audience and actual audience is a critical early warning sign. If your PLG motion attracts the wrong customer profile from the start, it won’t magically start attracting the right customers at scale. The product-market fit is off, and scaling just amplifies the mismatch.

Sign 5: Brand Confusion in the Market

The fifth warning sign came from outside the company. Industry analysts, potential enterprise customers, and market observers couldn’t understand what Reserv was anymore.

“What are you? Are you WordPress? Are you, you know, Contentful? Are you Sitecore? Like, who are you?” became the constant question from analysts trying to categorize Reserv. The self-service product had created such profound positioning confusion that even people paid to understand the market couldn’t place the company.

For enterprise prospects researching Reserv, the confusion was even more damaging. They’d see case studies and messaging about simple website deployment, then talk to sales about complex enterprise digital experience solutions. The cognitive dissonance killed trust and extended sales cycles.

Brand clarity matters more than most founders realize. When the market can’t quickly understand who you serve and what you do, every marketing and sales dollar becomes dramatically less efficient. This confusion was visible within months as analysts and prospects struggled to categorize Reserv, but the team dismissed it as a temporary messaging problem rather than a fundamental strategic error.

Sign 6: Enterprise Motion Atrophying

The sixth red flag was internal. While the team optimized for self-service signups, their enterprise capabilities were deteriorating. SEO for enterprise keywords declined. Outbound programs went dormant. Content spoke to self-service users rather than enterprise buyers. Sales lost fluency in enterprise conversations.

“We didn’t have any demand gen engine. We didn’t have any of the like basics in place,” Martha explains about the state of enterprise marketing when they finally decided to refocus. This atrophy didn’t happen overnight—it was a gradual degradation visible in declining enterprise pipeline, lengthening sales cycles, and reduced win rates.

The opportunity cost of focusing on self-service was measurable in real time. Every hour spent on self-service optimization was an hour not spent on enterprise deals worth 60+ times more revenue. But the team was so focused on making self-service work that they didn’t notice the enterprise engine dying until it was too late.

Sign 7: Rationalizations Replace Analysis

The seventh and most important warning sign was psychological. When confronted with poor metrics, the team’s response was rationalization rather than rigorous analysis.

Churn is high because we need better onboarding. ACV is low because customers haven’t discovered all the features yet. CAC is high because we haven’t reached scale. Expansion isn’t happening because the product is too new. Each quarter brought new explanations for why the metrics would improve next quarter.

“Don’t be afraid to make hard decisions quickly,” Martha advises. “The longer you wait, the more brand damage you do, and the harder the recovery becomes.” But making hard decisions requires acknowledging hard truths, and the team spent years in collective denial about what the data was clearly showing.

This is the most dangerous warning sign because it prevents acting on all the others. When a team is emotionally invested in a strategy working, they’ll find reasons to discount every red flag. The product just needs more time. The market just needs to mature. The metrics just need one more quarter to improve.

Why They Ignored the Signals

Understanding why smart people ignored obvious warning signs matters as much as identifying the signals themselves. The self-service dream was intoxicating. PLG had worked spectacularly for other companies. The initial traction looked promising. The team had invested significant resources and ego in making it work.

Admitting failure meant acknowledging that years of effort had been misdirected. It meant accepting short-term revenue loss to refocus on enterprise. It meant explaining to the board why the strategic pivot hadn’t worked. These emotional and political barriers kept the team pursuing a failing strategy long after the data showed it wasn’t viable.

The Framework for Early Detection

For other founders pursuing PLG, Reserv’s experience offers a framework for early detection. Within the first three to six months of launching a self-service motion, you should see:

Customers returning and expanding usage naturally. Unit economics showing a clear path to positive LTV:CAC ratios. Viral loops driving organic growth. The right customer profiles responding to marketing. Clear market understanding of your positioning. Core business capabilities remaining healthy. Data-driven decision making rather than rationalization.

If you’re not seeing these signals early, they’re unlikely to appear later. The honest question becomes: do we have the courage to acknowledge the strategy isn’t working and redirect resources before we’ve accumulated years of damage?

“You have to be just so buttoned up and really smart about how you spend your money and like what you say no to,” Martha emphasizes. Sometimes what you need to say no to is a strategy that isn’t working, regardless of how much you’ve invested in making it work.

The difference between companies that pivot successfully and those that slowly bleed out is often just the courage to acknowledge red flags early and act decisively. Reserv eventually made that call, but only after years of accumulating damage that took substantial effort to repair. The lesson: trust the early warning signs, even when hope suggests you shouldn’t.