(Founder) wanted to explain our intent behind the business… so here’s the origin story.
We tried to make the business work exclusively with self hosted and open source focus. I thought cloud would never work as we have so much competition. However we just couldn’t make hosting it at scale a good experience. We often have more data than customers production instances.
We wound up having to spend a ton of time debugging k8s in other people’s infra via screenshots. This wasn’t good for us or customers.
We kept having people hosting it themselves for no reason other than liking us so for the sake of a good experience for them, we made a cloud product. This represented the majority of users. It’s also cheaper for most people as we just have a big free tier and shared infra costs, so no hosting bill. Turns out cloud worked.
We didn’t want to abandon the OS project but we stopped trying to make money via an open core model. That means we call it a hobby instance because it just doesn’t scale very well.
> That means we call it a hobby instance because it just doesn’t scale very well.
Well you guys almost certainly operate posthog in Kubernetes yourselves. You either use a cloud-provided database, or you use a Kubernetes operator to run it on top of someone's infrastructure. Clickhouse, Kafka, whatever. They all have operators. I don't know when you adopted Temporal. Whatever. I may not be 100% right, but this is true in general.
The hobby offering doesn't have to scale poorly. It could scale just as well as your core offering. I am not saying you should, you are entitled to monetize something. It also doesn't have to be hard to install. You could author a Posthog CRD instead of using Helm as a low budget CRD. Maybe you already have that. Maybe your CRD exists as rows in some database and not in Kubernetes's dataplane. The interesting part of all of this is that you had an intuition that Kubernetes obsoletes a lot of the value proposition of traditional SaaS. The problem is figuring out, well, what IS the value proposition? People will endure a lot of brain damage to save on recurring costs, it is totally rational.
Another POV is this shows the limitations of Y Combinator's offering. It's true that enterprise sales goes way faster when it's startup CEO to startup CEO. Until you guys are worth billions of dollars, and even then, it's not 100%, your counterpart at a Fortune 1000 might be some CTO, some managing director with no real decisionmaking power. But he asks his team to pay the contractors in Pakistan to take the brain damage of self hosting Posthog and reimplementing your premium features, all because he cannot get meaningful approval for unlimited, use-based pricing, and then if you acquiesce to fixed pricing, you leave so much money on the table, and you sign up to dedicate a whole engineer to their customization and problems. While Kubernetes isn't to blame for this, it did make the Pakistan BANTA possible, and probably brought down pricing by a lot, hurting everyone trying to make good software for money. Very, very tough situation.
Something I can't really figure out is why Posthog hasn't gotten on Bitnami's (VMWare's) radar. Piwik and Matomo are. Mirantis has a great Kubernetes distribution, maybe the most painless one for people who are willing to take brain damage, and they could wind up doing this too. As always OSS is a value for someone else's thing that that someone else didn't pay for.
I can only tell you my experience as a newcomer to PostHog last year. I went to try it out, and visited the documentation to figure out how to get it up and running. The documentation sent a very clear message of “You’d be a fucking idiot to put this into production. The open-source version is pathetic and can’t handle real traffic. Pay us.”. This immediately killed all interest I had in PostHog and I didn’t go any further. Your open-source version doesn’t have to scale indefinitely, but if you can’t stand behind your open-source version at all, I don’t trust your commercial version at all either. A closed-source product is preferable to an open-source product where the maintainers strongly warn people not to use it.
This is well said and I agree. It is disingenuous and raises cognitive dissonance to offer something but not stand behind it and in fact warn people NOT to use it.
We tried to make the business work exclusively with self hosted and open source focus. I thought cloud would never work as we have so much competition. However we just couldn’t make hosting it at scale a good experience. We often have more data than customers production instances.
We wound up having to spend a ton of time debugging k8s in other people’s infra via screenshots. This wasn’t good for us or customers.
We kept having people hosting it themselves for no reason other than liking us so for the sake of a good experience for them, we made a cloud product. This represented the majority of users. It’s also cheaper for most people as we just have a big free tier and shared infra costs, so no hosting bill. Turns out cloud worked.
We didn’t want to abandon the OS project but we stopped trying to make money via an open core model. That means we call it a hobby instance because it just doesn’t scale very well.