How do you vet candidates on their abilities to execute a PLG strategy? What do you look for in their past experiences? What are your favorite interview questions? Do you do any assignments?

Personally, I hate mini projects for strategic roles and think they should be abolished altogether. The only exception to this rule is internal transferring, esp if you have no prior experience in that type of role.
I prefer that prospective candidates put together a presentation on a previous strategy they've built. Presentations are a must-have skill for any product marketer, so this is a great test to see how well they tell the story and if the messaging sticks.
Presenting previous experience ensures that you're getting the best from your candidate. They should be experts on that industry, the users, the problem/solution, etc. You should be able to ask them any question, no matter how detailed, and they should be confident in providing a thorough answer.
If you were to ask those same detailed questions about a mini project for a product and industry that is likely foreign to them... you'll get either lies or "I don't know". This isn't an efficient use of anyone's time!
Some basic questions to that any PLG product marketer should have no problem answering:
- What do you think is the difference between PLG product marketing and traditional product marketing?
- How do you know if a company is successful at PLG strategy?
If you're looking for some green flags, I'd recommend folks with B2C experience and/or experience with other types of marketing rather than in sales.
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