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      • Product Manager ramp up
    • Merch store
      • Overview
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      • Operations hiring
      • Design hiring
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      • Developing locally
      • Tech stack
      • Project structure
      • How we review PRs
      • Frontend coding
      • Backend coding
      • Support hero
      • Feature ownership
      • Working with product design
      • Releasing a new version
      • Handling incidents
      • Bug prioritization
      • Event ingestion explained
      • Making schema changes safely
      • How to optimize queries
      • How to write an async migration
      • How to run migrations on PostHog Cloud
      • Working with ClickHouse materialized columns
      • Deployments support
      • Working with cloud providers
      • How-to access PostHog Cloud infra
      • Developing the website
      • MDX setup
      • Markdown
      • Jobs
      • Overview
      • Data storage or what is a MergeTree
      • Data replication
      • Data ingestion
      • Working with JSON
      • Query performance
      • Operations
        • Overview
        • sharded_events
        • app_metrics
        • person_distinct_id
    • Shipping things, step by step
    • Feature flags specification
    • Setting up SSL locally
    • Tech talks
    • Overview
    • Product metrics
    • User feedback
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    • Releasing as beta
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    • Designing posthog.com
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  • Strategy overview

Strategy overview

Last updated: Oct 25, 2022

On this page

  • TL;DR
  • Context
  • General principles
  • Mission
  • Long-term vision (for 2026)
  • What should we be working on today?
  • How should we prioritize between competing directions?
  • Direction for 2022
  • Target customers for 2022

TL;DR

Our mission is to increase the number of successful products in the world.

Context

We started by building an open-source product operating system with many of the things you'd need to build a better product - product analytics, session recording, feature flags, experimentation, and a customer data platform to import/export and transform data. Within a year, we had thousands of customers using us and we started generating revenue.

We focused on our paid product in the Summer, 2021. We quickly hit a milestone for the first 5 reference customers. In 2022, we have figured out how to accelerate our top of funnel growth, and we realized we should focus on nailing Self Serve Mid-market ($20-70K ARR deals), whilst deepening the core product.

Today, we're optimizing conversion to paid revenue, and carefully expanding the platform again, into adjacent use cases that will meet the needs for our existing user profiles.

We now add more companies each week than any closed source SaaS rival, and we're the open source standard for all our applications.

General principles

  • For any company, nothing matters more than product market fit. If we get that right, it’ll be much easier for customer success, marketing or sales teams to succeed. As a result, we're 100% inbound. We invest in product, not cold-calling people that don't want to buy from us.

  • We are a late mover. All the products we build into the platform have product-market fit. This makes it faster to ship.

  • A wide strategy is winner takes all. The wider we get, the faster we grow, so the wider we can get. We are here to be ambitious.

  • Our company is engineering-led - a wide strategy demands it. We have small teams that operate like their own startups for this reason. We optimize for autonomy (thus, speed), not control.

  • Talent compounds. We hire a smaller number of stronger people that flourish with autonomy. See the point above.

  • We are open source - we work in the open to build trust and community. We haven't built our defining feature yet - the whole company is a continuous work in progress on the internet that anyone can take part in. This keeps us close to users and builds a unique brand.

Mission

“Increase the number of successful products in the world”

Long-term vision (for 2026)

Where do we want to get to?

In 2026 we will go public with $100M ARR. To achieve this, PostHog will need to be the standard devtool for building better products.

How do we get there?

  • Build for developers
  • Make every developer want to tell others about us
  • Our biggest users self-serve to paying customers
  • Go broad and develop all the tools our customers need to build better products
  • Empower developers to build on top of PostHog

What should we be working on today?

The mechanics of success

We set quarterly OKRs to keep us on track.

How should we prioritize between competing directions?

While there is value in the items on the right, we value the items on the left more.

Breadth vs. depth of capabilities

  • Breadth: build basic versions of every feature needed rather than a small set of sophisticated ones, so our customers can consolidate.

MidMarket vs. Enterprise

  • Mid-market: focus on acquiring more high quality Mid-market customers (who may start using for free) over big ticket contracts, so we can get better feedback and learn faster.

Integrations vs one-stop-shop

  • One-stop-shop: build all the things directly into PostHog if possible. This means customers don't have to buy another product or integrate with anything else. We are wide enough now to pull this off.

Self-hosted vs. Cloud

  • Cloud: If customers can use cloud, encourage them to use cloud. Maintain a self-hosted version and migration path, but don't push it. We are the most flexible solution, which enables growth. We offer a generous free cloud tier so we can become ubiquitous without the cost/hassle of self-hosting.

Reject the “modern data stack” vs. adapt to it

  • Reject: We enable our customers to ingest, store and analyze data on their infrastructure, we don't believe tons of integrations, dealing with multiple vendors and sending sensitive data to multiple cloud providers is the right approach.

Direction for 2022

  • 2 word summary: Nail self-serve
    • Customers
      • Focus on large-mid-market. E.g. Large initial contracts ($20k-$70k/year) and smaller deals in organizations that will eventually become large
      • Non Goal: Start doing outbound sales
    • Product
      • Goals:
        • Quality: Our core features (insights, recordings, feature-flags / experimentation) work like a Swiss watch
        • Self Service Subscription: Customers of every size sign-up, start using and subscribe to PostHog without asking us for help
      • Non Goals:
        • Build lots of new low quality / partial features
        • Build everything a single enterprise customer wants just to close a deal

Target customers for 2022

Our ideal customer is a large-mid-market (~$20k-70k) who meets as many of these criteria as possible:

  • Needs
    • Cares about user data
    • Need to excel at product led growth
  • Haves
    • Have budget and savvy engineers are the decision makers
    • Have a central analytics or devops function
    • Have a product aimed at businesses

Questions?

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Business model

PostHog is a for profit company that balances the need to improve the open source code of PostHog with the need to add paid features, or PostHog Cloud, in order to generate income. We have an open core and cloud business model. Why do we work on the open source product? When we work on the open source product, it increases the community size, which means we end up with more features, and thus a better product. This means we get yet more community growth and it also helps with revenue growth…

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Authors

  • justinjones
    justinjones
  • Paul Hultgren
    Paul Hultgren
  • James Hawkins
    James Hawkins

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