From Pivot Hell To $1.4 Billion Unicorn

**Brad Flora** (0:05)
I'm here today with James Hawkins, CEO and founder of PostHog from the YC Winter 20 batch. James is here hot off the news of raising a 75 million Series E round of funding at a $1.4 billion valuation, making PostHog the latest YC unicorn. Today, we're gonna talk about how PostHog got started, how they pulled off what I think is one of the best YC pivots of the last decade, and how they use attention and humor to compete with not just other tech companies, but with everything out there for attention. Welcome, James.

**James Hawkins** (0:34)
Thank you for having me.

**Brad Flora** (0:35)
James, could you tell us what is PostHog? Explain it to us a little bit.

**James Hawkins** (0:39)
Sure. So with YC, I always feel like this is my homework, being marked by the teacher. We help users to debug their product, to ship features faster through things like feature flags and so on. And we help keep all their customer product data in one stack.

**Brad Flora** (0:54)
And tell us a little bit about the state of the company, how big it is. You guys are pretty big these days. Give our viewers a snapshot of what's going on at PostHog.

**James Hawkins** (1:04)
Sure. So we're about 160 people, around 300,000 customers across free, and we have a lot of free customers unpaid. We have several thousand paid. We have, I think, 16 or 17 products in production or in development. They're all at different stages. And we've been, I guess, at the moment, the main thing we're doing and the reason why we did a lot of raising this year, we're pushing very hard on getting more products still out of the door. So instead of kind of going up market, we're going just across more of the customer data that people are generating. And we're automating a ton of things through AI, which has been a long and arduous process. But we're starting to get to the point where we're starting to get proud of what we've achieved so far. But I still kind of feel like, oh, we haven't got started yet. There's a lot more to go, which I don't think is a feeling we'll ever go probably. But yeah, it's like really a lot of fun. And we're just starting to scale up pretty aggressively now.
I think we started at 70 people this year. And so we're supposed to be about 200-ish by the end of the year or something. So we're starting to get properly and took on a scale up at this point.

**Brad Flora** (2:05)
So you've got this team, you've got all these customers, you have all these products that you're developing and improving on. But what was the initial product that PostHog started with? What was that? The first thing that you guys brought to market is PostHog.

**James Hawkins** (2:16)
Sure. So yeah, the first thing that worked for us, we had a bunch of privates before, was self-hosted product analytics. Because we pivoted so many times, and every time we had to set up product analytics over and over again, and we were just getting frustrated having to implement it, I think we found that there was an awful lot of really strong competition. But we felt all the products were built for product managers to force engineers to go implement. But it's like reasonably technical, especially my co-founder is a very technical co-founder, which is getting annoyed at like, I can't, I want to write SQL, I want to see the data underneath. I would like to keep this in my infrastructure so I don't lose data due to ad blockers. So we thought, okay, we think there's room for a self-hosted alternative. And we also, we spent some time talking to potential customers, and we found that quite a lot of people had self-built their analytics stack and were maintaining this kind of janky system, which we felt if we can productize something like that, it was new infrastructure and we could see this working quite well. So yeah, we started with just open source product analytics on Hacker News. We spent like the last four weeks, the batch desperately trying to get that out of the door.
Then we pivot, we iterated it afterwards, and now we're all cloud-based with multi-products, but that was the thing that landed for us finally.

**Brad Flora** (3:24)
I think of PostHog, well, there's this meme among founders of Pivot Hell. It's a thing that YC founders talk about a lot, where you're going from idea to idea to idea, and you're trying to find something that's going to work. You guys not only came out of Pivot Hell and have built this awesome company, but what you built was literally forged in the fires of Pivot Hell. While doing these pivots, you had this pain that only came because you were doing the pivots, and trying to do them at a high level, setting up the analytics over and over again. Tell us a little bit about how you guys actually got to YC, and started this journey of pivoting and finding startup ideas that might work.