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Finance principles

This is how we think about financing PostHog as a business:

  • We’re efficient because it allows us to build more products.
  • We want to always be default alive.
    • Losing control means becoming inefficient, because we would need to raise more money from VCs, who would push us for more aggressive growth to meet their goals. This means building fewer products and spending more on shorter-term bets, like large sales teams.
    • Being default alive means that profitability is always an option we can take, even if it is not a goal right now.
  • Going from inefficient to efficient is really hard, so we always want to default to being efficient. When we think about our products, this means:
    • Hiring efficiency always matters.
      • New products start with just 1 or 2 people - we don't spin up a whole team on day 1.
      • Products at scale should stay efficient as they'll be able to ship faster without worrying about coordination costs.
    • COGS only matter at scale.
      • New products shouldn't have to worry about this - they should optimize for speed.
      • Products at scale have to be profitable - if they aren't, we won't stay default alive.
  • We trust the team to spend money sensibly in the best interests of PostHog, and not to waste money.

Finance runbooks

These can be found in the company-internal repo here.


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