PostHog raises a Series E at $1.4B valuation with 240,000 customers and 16 products

you about Turbo Puffer. Search every bite serverless vector and full text search. Built from first principles and object storage fast, 10x cheaper and extremely scalable. We puffing Simon Turbo Puffer tomorrow live in the TVP. Can't wait. But for now, we have James Hawkins in the reream waiting room from Post Hog.

Post Hog. Here he is. How you doing? Uh yeah, very well. Thank you very much. Give us give us the fundraising news and then we'll figure out what you do. Let's amp it up. What you got for us? Sure. Well, first of all, I'm very excited to announce that pineapple does not belong on pizza. Whoa. Shots fired.

I I I love pineapple on pizza. That's I don't I don't I'm riding with James here. Okay. Well, then you can hit the gong cuz I like this guy. Yeah. Yeah. Yeah. He's my mortal enemy. No, I understand. It's an acquired taste. What inspired that? What a timeline debating that?

That that that's a that's an eternal point of debate. Uh oh, it's fine. It's not a debate. is decidedly right. What about hot dog? Hot is a hot dog a sandwich. Hot uh is No, I don't think that's true. What if you eat it like this? What if you turn it 90°? Then it looks like a sandwich.

I feel like I feel like uh I'm not American. I have a less strong opinion on this. I think I think you guys are more If a dog wore pants, would it wear them with on the two back legs or across all four legs? These are the Wow. You're not straying from the hard questions. These are the hard questions.

I'll give you the actual I've got one more. I've got one more thing. Um, so I'm very pleased to announce that we have raised our series E million 1. 4 million post. Congratulations. Massive. Uh, what what unlocked it? Uh, walk through the business, what's working, uh, the customers, the the problem set, everything.

Sure. Uh, so Postto is a very developer focused set of analytics tools and feature flags and stuff at the moment. Um, we try and help you understand uh, how to build a better product basically. basically help you understand your customers in lots of different ways. Um like errors, analytics, we have 16 products.

Um what's working well? 16 products. Yeah. I think about 10 or 11 that are charged for and the rest in production. That's right. Uh so yeah, we've been busy bees building stuff. Um what's working well? We've got tons of engineers who we have really looked after.

We think there's been a big rise in product engineering engineers who want to decide what to work on. Um, and so we've been able to sign up just an awful lot of them. I think we have about 240,000 customers across like free and paid. Um, and so we're kind of like a heavy productled growth.

Um, from engineers just installing our stuff basically. What some of these tools I imagine would uh be fertile grounds for hyperscaler competition. What's been the secret to uh maintaining differentiation against the big cloud platforms? uh all the products in one has been the main thing. Um going very very wide.

Um because the way we think of it, there's lots of tools that help you you there are feature flag products, their experimentation products, their analytics tools, but it's the same customer underneath all of these.

And so we kind of felt it's just better, it is more important to our users to have all of their custom data in one spot and lots of things you can do off the back of that than it is to um buy like 15 point solutions basically.

What's your take on the idea of the compound startup versus uh iterating and adding one product after the other? How focused do you want to be on a new product at one time?

Do you want to orient the entire company around the next product or do you want to have you know let's just get a bunch of things started we'll it will iterate towards greatness in all of them kind of simultaneously uh much more the latter.

So um we start a couple of products at a time um but we always have a small team that we leave behind on each product.

So back in the early days when we're smaller we would go hey new shiny thing everyone would move over y but then as the existing one got more and more growth um we'd start we just weren't very responsive to customers and so on. it didn't feel like we're looking after people properly.

So we have tiny little teams like the average team size of postto is probably three people on each product. Um it's just like three engineers deciding what to build. Um we just try and get out of the way. Um so we're fiercely anti- bureaucracy internally.

Um so yeah this this small team structure has worked great like very flat, very wide. Um and a lot of autonomy for engineers. Yeah. When you're when you're thinking about creating a new product, what is what is the bar in terms of turning something from an experiment?

you know, at what point would you would you launch something and maybe shut it down or or or if you're launching or by the time you're launching something, are you committed to maintaining it over the long run? I'm curious what kind of the the framework is. Sure.

Um yeah, we really um we start at the bottom end of the market. So the bar to us launching something's pretty low like we'll start targeting two person startups kind of doing YC for example is kind of uh start from the start is a phrase you hear a lot internally.

Um, in terms of retiring stuff, we haven't had to retire a product at this stage. We've always built kind of products where we're going in with a late mover advantage. We consider it. Um, so we're going in after a lot of the market. This is actually behavior that we're having to change now um with AI in particular.

Um, because we're looking at figuring out how can we use like this sort of multi-dimensional data and all these different tools together. Um, which is one of the challenges and that's partly why we did this round because we wanted to have the time and space and the ability to kind of go nuts.

um trying to automate the way I'd kind of consider it is a bit like if you're trying to understand a painting and you can only see the color blue like one data type um you'll get a rough idea but it won't get a totally correct idea of what's happening and so we kind of think having all the tools and all the data is a bit like having all the colors um but this is something that's new to us and it will take a little bit of time um and some confidence uh so that's kind of yeah it was probably the main driving force behind wanting to raise at this point last question for me um how has AI changed the business over the last few years there's so many different ways that you can launch AI products, you can use AI to speed up product development.

There's a million different ways, but what's been the biggest thing that's actually uh worked for you? Um, it's massively sped up product development and because we're building so many products at once.

Uh, it's given us a big it's just we already thought that was happening because there's more open source software available. Um, and it's just ramped up that fully. So now kind of we even have companies quite regularly emailing us like smaller startups being like, "Hey, would you consider buying a company?

we don't know how to compete with compound approaches in our industry like we've become a feature of a bigger platform for example um and so I think we got lucky with that respect um we are targeting engineers and their workflow is entirely changing um and so we're trying to move towards a world where we're generating kind of pull requests for people based on like error data their session like video clips of using their products um like their feedback and everything else that we're kind of feeding in so um that is a totally dramatic change for us um I think we've gone from honestly to like in complete excitement um about what's going on.

That's great. Uh one note, chat absolutely loves the website. You should look at it, John. It's absolutely stunning. It's it's probably the best iteration I've seen of of take, you know, building like a desktop and making a website just like a desktop, right? Feeling like a system. Absolutely stunning. Uh, one question.

Was Postth Hog uh, a hot company at YC demo day or did it take time to to get people to kind of uh, come around to the team and the opportunity? Um, we actually had I think relative to our batch we were doing quite well. We had a lot of traction just free open source usage.

We just had an open source project to start off with. Um, but our seed round was a train wreck to raise. It was like March 2020. Um, and so I was like, man, we got this thing done in like 3 days. And then I was like, I may not live to see the end of this round.

So yeah, we made like, you know, we made a bunch of people who put in like random little 5k checks, a bunch of money, which is actually one of the most fun parts if I'm honest. Um, so yeah, the C round was very hard. The later rounds it kind of got easier.

um like the series A was um like Google Ventures um kind of preempted and we went with it because we uh there was so much kind of fear in the market fundraising at that time and then the later rounds all got much easier because we just had kind of obvious traction and we're quite an efficient business um because we're inbound and so we haven't really needed money and that's our first rule of fundraising is do you not need to fund raise but we're not against fundraising and that served us extremely well later on but yeah the start the first round was the hardest by miles fantastic such a such an important lesson for anyone out there.

It's like it's if your seed round is brutal, you know, it's not not necessarily can be an indicator that you're on the totally wrong path. It can be an indicator that people just don't understand exactly the opportunity or or just how good the team is.

So, uh thank you for coming on and giving the update and congrats on on uh on the round. Thanks for coming. We'll talk to you soon. Great to meet you, James. Bye. Cheers. Let me tell you about Linear. Linear is a purpose-built tool for building and planning products. You heard it from him. They built a lot of products.

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