How we make money

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We make money from those that have it and like our products. We don't make money from those that don't.

How we do sales is based on the best experience for our Ideal Customer Profile

I cannot think of any harder group than developers to convince via a cold call or email to buy software. We should focus all our energy on inbound – that's why we don't do outbound sales.

All the other rules here are based on what we felt would be the best experience for an engineering customer, whilst allowing us to grow revenue in the long run.

Don't let pricing get in the way

Before a user has decided to buy the product, we should let them try it for free. Not only does this mean they can immediately self-serve without having to get budget internally, it also reduces the need for a large sales team to convince them otherwise. When someone is looking for a solution, they are ready to install it – but only if we can get out of the way commercially.

Once a user likes the product, we don't want to create a big decision around continuing to expand their usage with us. (For example, if we suddenly charged a large recurring price per month.) Instead, we charge a tiny fraction of a cent for each extra event they send.

Charge based on what people use, and give users control

Some users want to start with just a little usage of one product. Others replace five products with us. We should price to reflect this. We believe it's better to have a little extra pricing complexity to provide a much better value option, than an "all-in-one" price.

We charge by product and by usage of those products that people need.

Beyond which products we use, we look for other ways to give users control, such as spending limits on session recordings.

These principles mean that they will spend less than they otherwise would have, but it means they'll stick around. We don't want users to churn if they are unhappy with what they're spending; we want them to better manage how they use the platform.

Be the cheapest for each individual product

We can make it up by selling other products to the customer over time. This way, it's always a no-brainer to pick PostHog, we get as much word of mouth growth as possible, and our single product competitors can't compete since they have nowhere to go.

Principles for dealing with big customers

The most important thing here is to remain focused on building the best product, not on what a single big customer needs.

  • We don’t care about losing deals. If we have to walk away from a deal because we'd have to compromise on these principles, we will. We can do this because we have a really strong growth engine with our ICP customers.

  • We don't contract deliverables, and we especially don't contract to provide deliverables by a certain date. This is because, on principle, a single customer is forcing us to build something.

  • We will build things for a big customer, as long as we are confident they won’t be the only user of that thing. Re-shuffling the roadmap a bit could make sense - but adding new things that others wouldn't use, doesn't.

  • Customers need to try PostHog before they expect us to change things. We love feedback from customers. We don't love big requirement documents from people that haven't used our product before.


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