PostHog - The boldest b2b company

This is it. This is the version of the newsletter I’ve wanted to write since day one. It’s the first interview I’ve done but I have many more lined up over the coming weeks. Reply and let me know your thoughts - just a few words will help me improve.

Sup hustlers 👊🏼!

I started lowercase on the thesis that b2b companies have to be bold and brave in their GTM in order to stick out in a sea of sameness.

I know I’m not alone in this observation but today I have a treat. A north star, a muse, for all of us in search of inspiration as we build.

We’re going to take a squinty eyed look at how PostHog builds and grows while having what is probably the most brave brand in b2b. And then we’re going further…

I had the chance to interview James Hawkins, CEO and co-founder of PostHog to dig into:

• 😂 How PostHog remains hilarious while it grows

• 🪟 Whether PostHog’s transparency is a double edged sword

• 💰 Sales at PostHog

• 🧘‍♂️ How PostHog thinks about focus

• 🔧 The SaaS tools in PostHog’s tech stack

James was kind enough to sit down for an interview (he actually stood the whole time) and pulled back the curtain on how PostHog has been able to make a dent in the product analytics market with eyes now set on taking on the likes of Snowflake and Salesforce.

Founded and funded (Y Combinator, Google Ventures) just four years ago, PostHog has built a powerful suite of analytics tools used by developers at startups - thanks to a generous free tier - and all the way up to giants like Staples, Airbus, and DHL.

Ok - let’s dive in.

The PostHog way - fun and bold in b2b.

Q: Mascots in b2b are pretty rare. Why the hedgehog?

James: Do you know the collective noun for a group of hedgehogs? It’s an array. Clearly a development term - they look after data, they’re trustworthy, and they have a bit of a spiky edge. When we started the company, every competitor we knew about had a blue website, lots and lots of words, yet no information on the pricing page.

We just thought, from a marketing perspective, we could come in and do way better than this.

The part of our convo coming up was so helpful to me. James adds great context as to why b2b needs to be bolder

James: The direction of travel (for a b2b company) is that you get more boring as you get older. Companies put a veneer of ‘what should we sound like’ at the top and as a result everyone sounds the same and boring and dumbed down.

We realized that we’re not going to win on polish but we can win on being ourselves… Good marketing is polarizing. I’m looking at something wondering ‘what the f*** is this?’ and other people look at it like, ‘this is f***in brilliant!’.

We want to get a 10/10 response to get high signup numbers at the end of the day. We only build products in markets where there’s at least 1 billion dollar company and usually there’s 3 or 4.

Q: On Getting User Validation: Do you go ask a bunch of users what they think when you already know there’s a billion dollar solution they’re using?

James: We don’t. We’ll have a sense already of what to build because the product category already exists. We’ll build the five or so core features because we know there’s demand so we can just ship.

But we want to see successful competitors doing $100M in revenue. What we don’t want to see is 20 startups all having raised seed rounds trying to take on a specific barrier.

PostHog’s Insane Transparency.

Before we hear again from James let’s take a look at a few examples of how transparent PostHog is. Get your favorite bookmarking tool ready.

• How PostHog spends a $150k monthly marketing budget

• How PostHog build its email onboarding sequence

• How PostHog pays its employees | salary calculator

Now do you see what I mean? These folks operate with next level transparency - I dare you to ask your CEO (or yourself) what the comfort level would be sharing these things on your company’s blog. Let me know!

Ok, back to James.

Q: Has Transparency Helped or Hurt?

James: It’s had no material negative impact. There have been a lot of people copying us - like a lot. But then I’m like, “Are you realistically going to win by just copying?”

Me: And you’re also very transparent about your roadmap - even in this convo saying you want to build a CRM one day.

James: Yeh and the other effect is that I hope it just puts other people off. So for example if we just declare we’re going to build XYZ new product then probably it somewhat puts other people off from trying to build the same thing.

Now we have people applying for jobs saying that they were going to build something but now see that we’re going to do it and would rather join us.

And the upside is - the reason we did a lot of this stuff in the first place was to build trust. Transparency is the foundation of trust. It’s great for recruitment. With customers it builds trust cause they can see how we operate and how we’re going to handle them, how we do sales, how we negotiate - which is going to get even more public as we get more advanced.

I’m shocked more people don’t act like this.

Me: Have your VCs ever been uncomfortable with all this?

James: Nope. They know it’s good marketing and branding that drives demand - I think they want us to do more of it.

I think everyone operates their company to minimize downside but to have impact you’re not trying to minimize downside risk you’re trying to go out and achieve the thing you said you would.

Q: You came from a sales background, how’d you take on the role of Product leader of such a highly technical product?

James: I was a really bad developer early in my career. Which was really helpful even if you’re sales but there’s no chance in hell that I would even get a job at PostHog as a developer.

Q: Have you begun any outbound motion? What does sales look like at PostHog?

James: It’s non-existent! We got to about 10M in ARR without the existence of any outbound sales tool. Over the last 12 months we’ve gone from ~270 to ~1,200 paying customers and gone from just 2 to 3 sales people.

We’re trying to move the cross selling motion up funnel. 1500 companies install PostHog per week. 30 people book a demo per week. So there’s a huge flow of leads and existing customers trying to do more with us so we’re looking at spending a little bit of money more in sales simply to serve this demand better.

We’d rather have few accounts per person so our sales people can go deep on each account and cross sell more of the PostHog platform.

Our CAC payback period is in days right now so we’re probably underinvesting in our growth currently.

Q. From day one it feels like the vision was a platform and not just one feature first. How do you think about focus?

It didn’t happen upfront… but we let engineers decide what to build at PostHog. So if I want X and engineer wants to do Y - we’ll do Y.

We had this with session replay where an engineer said I want to build session replay because users are asking for it. I said I think this is a bad idea but you be you and ship it. And it was really popular!

Then my cofounder built feature flagging in a day and it became popular - so we were like cool, let’s crank the dial up to 10 and list out all the products that are relevant. We tried to come up with a philosophy for which one we’d build and which ones we wouldn’t. So it was quite organic and it took us a while to get used to.

Q. One of the tools you’re building now is a Google Analytics competitor - I assume to fill the void because of GA4.

With web analytics - the first part of our strategy is to build all the tools in one so developers have access to them. Part two of our strategy is to get in first. We don’t try to put in energy into displacing the entire data stack if someone has implemented it all.

Instead we’re targeting new digital products, it might be a startup that has nothing or a new product or a small product that’s in enterprise that’s being built. That’s how we get in the door initially without a big migration.

Web analytics is very high up the funnel. If you build a website as a company you’ll stick Google Analytics on there but we want PostHog to be there. We’re also looking at a cookie banner product since there doesn’t seem to be an open source standard so look out for this in the next year.

Q: PostHog’s Tech Stack

• Strapi and Gatsby for the website

• Deel for hiring mostly

• GitHub for almost all actual work

• Google docs when GitHub is a bad fit

• Google meet and calendar

• Ashby for recruiting

• Slack 

• Salesforce for CRM, and Pocus to help connect it with user behaviour

• Storybook for it design system

• Figma for design

• Tailscale for security
  

Alrighty - that’s a wrap! Thank you to James (X/LinkedIn).

Be sure to follow me on X or LinkedIn where I’ll post video clips of my convo with James in the coming days.

Links of the week

• Google’s SEO API leak. The SEO world is abuzz with Rand Fishkin’s leak of over 2000 pages of internal Search API documents that have been confirmed to be real. I wouldn’t make wild changes yet but there are some juicy insights into backlinks, title tags, mentions and more.

• Well Played? When I said that b2b businesses should be bold and brave I really wasn’t expecting this from Canva. And, as cringe as it is, it’s getting millions of impressions that it wouldn’t have were it not so horrendous. Hats off to Canva.

About Lowercase

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I highly recommend Rikin for any marketing consulting needs.”

• Maxwell Bonnie, Co-founder of Saltbox

If you need help scaling your b2b company simply reply to this email.

What I’m Reading

• Read Write Own - Chris Dixon’s latest book on how the internet has unfortunately not lived up to its promise with power concentrated to a few platforms but how blockchain still has a shot of achieving that reality.

Until next week!

Rikin

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