PostHog · Strategy · Mid · 45 to 60 minutes

How should PostHog price a multi-product platform?

PostHog is a developer platform that offers product analytics and other tools for building, testing, and improving software products. Answer this product management case and get it graded line by line against a weighted rubric.

pricing strategy
strategic thinking
monetization
trade-off analysis
written communication

The situation

You are the PM responsible for monetization at PostHog. The company started with product analytics, and charging based on event volume was simple to explain and worked reasonably well at first. Now PostHog has grown into a multi-product platform, and leadership is seeing signs that the current pricing structure may no longer fit how customers use the product. Some customers appear able to get meaningful value from products other than analytics while generating very few, or no, analytics events. That raises concerns about fairness, cost coverage, and whether one pricing meter is pushing the wrong customer behavior. At the same time, changing pricing is risky. A single meter is easy to understand, the company wants to keep a strong free experience, and any change could create confusion or slow adoption of newer products. The CEO asks you for a recommendation on how PostHog should price a growing multi-product platform over the next year, including whether to keep one shared meter, split pricing by product, or use another structure.

What to produce

Write a 1 to 2 page strategy memo.

Your answer must

Explain the core problem with the current pricing model, and identify at least two distinct failure modes it can create for customers or the business.
Compare at least two alternative pricing structures, including one shared meter approach and one approach that treats products separately or semi-separately.
Make a clear recommendation, and explain how it affects free users, paying users, and customers who mainly use non-analytics products.
Describe the main implementation or migration plan for existing customers, including how you would reduce confusion or perceived unfairness.
Define 3 to 5 success metrics and 2 to 3 leading risks you would monitor in the first 6 months after launch.

Constraints

Work only from the summary provided, and label any assumptions clearly.
Your recommendation must fit a multi-product platform where products can have different usage patterns and cost profiles.
Keep a free path in some form, and address how the free experience should interact with paid pricing.
Do not rely on one product's usage as a proxy for all product value unless you explicitly justify why that is acceptable.

Format

Use sections titled Problem, Options, Recommendation, Rollout, and Metrics and Risks.

How PostHog actually played it

PostHog moved from one meter on product analytics to charging per product, after abuse from users sending no events but using other features. It reports that usage rose once charging began and that it supports team autonomy. A clear account of why and how to price a platform per product.

A single meter invites abuse when products have different costs
Focusing on paying customers improves the free product too
Per product pricing gives small teams autonomy

Built from What we've learned about multi-product pricing (so far) by James Hawkins.