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

Tido Carriero on Segment's missed pricing opportunity

25 Feb 2025 · 2 min

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1:46

In this interview excerpt, the host asks Tido Carriero whether building a dedicated pricing and packaging discipline could have accelerated Segment’s growth. Carriero emphasizes that pricing is uniquely foundational because it touches every function—sales, customer success, renewals, product, and engineering (through metering). He explains that Segment’s pricing changes were largely reactive and occurred only every two years, largely because launching smaller experiments was technically and operationally heavy due to complex metering and gating requirements. This made frequent, incremental pricing tests difficult. When asked if more frequent experimentation could have unlocked significant ARR growth, Carriero affirms that it likely would have, suggesting that the lack of smaller, iterative pricing experiments was a missed opportunity for material revenue expansion.

Are there things that the company could have done around building a pricing and packaging function or discipline that would have helped the, the company grow faster? Or does it not really matter given the strength of the company's product-market fit during that— during—
yeah, I might answer in a slightly different way, which is I think pricing is like so fundamental to like a company's relationship with their customers. I think it's the only thing at a company that truly touches every single function. Pricing, like, deeply affects the sales team. It deeply affects the customer success team, the renewals team. It deeply affects how, like, product, like, you know, 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 like, 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 like smaller experimenting. Um, which it was so hard to like go launch an experiment and figure out how we were going to like, you 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.