Fynn GloverCo-Founder & CEO, Schematic · Co-founder & CEO of Schematic | Runtime monetization infrastructure for SaaS & AI companies

Tido Carriero, ceo of Koala, on pricing lessons from running eng at Segment #pricingtips #saas

5 Dec 2024 · 1 min

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In this interview excerpt, Tido Carriero (CEO of Koala) explains that pricing is the only company function that touches every department—from sales and customer success to product and engineering metering. He argues that pricing changes should be carefully planned and heavily tested, but at Segment they were reactive, making major pricing shifts only every two years because small‑scale experiments were difficult to launch and gate due to heavy engineering and sales constraints. He acknowledges that more frequent, smaller experiments could have accelerated ARR growth by improving the slope of growth curves.

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I think it's the only thing at a company that truly touches every single function. Pricing deeply affects the sales team. It deeply affects the customer success team, the renewals team. It deeply affects how product shows up. It deeply affects the metering you need to do on the engineering side, to name a few. And so I think when you change that relationship with a customer, it needs to be very well thought through. And obviously the more you've tested it, the better. But I think the reason it was reactive was we really only felt like we could make these changes every couple of years. I think maybe the retrospect thing is less that these major shifts should have been happening more often. The thing we executed less well on, in my opinion, is we didn't do as much smaller experimenting. It was so hard to go launch an experiment and figure out how we were going to get gate it, like the, the kind of core metered stuff, uh, was really heavy. And even, even the sales stuff was, was pretty heavy to go do experiments on. So yeah, I felt like we were sometimes showing up to the, the big pricing change every 2 years, like not knowing quite as much what would happen in the field.
In retrospect, do you think the experimentation would have unlocked a material, material ARR growth if you had experimented more frequently?
For sure. I think in particular, It would have been like more of like the slope of the lines.